Health Financing in Bangladesh: Why Changes in Public Financial Management Rules Will Be Important

Abstract

Bangladesh has achieved remarkable improvement in health indicators since its independence in 1971, despite poor economic conditions. It achieved Millennium Development Goal 4 on child mortality and progressed substantially toward Goal 5 on maternal mortality, even with health system bottlenecks such as weak governance, insufficient health financing, and limited capacity to address local need. In a country with a history of adopting low-cost strategies with high health impact, focusing on primary health care—even with limited resources—was the single most important factor in these achievements. More recently, Bangladesh has committed to achieving the Sustainable Development Goals and universal health coverage. Continuous economic growth in Bangladesh has increased the buying capacity of the population, and increasing income levels and education have led people to seek more and better quality health care. Such growth does not come without complications, as can be seen in the changing burden of disease from communicable to noncommunicable diseases, high disease burden among the urban population, and increasing out-of-pocket expenditures on health. Total health expenditure in Bangladesh in 2015 was 2.9% of gross domestic product, one of the lowest allocations in the world. At the same time, out-of-pocket expenditures represented 67% of total health expenditure, which is one of the highest proportions in the world. Annually, about 4% of households are pushed into impoverishment due to high outof-pocket expenditures on health. Bangladesh’s Health Care Financing Strategy 2012–2032, established by the Health Economics Unit of the Ministry of Health and Family Welfare (MOHFW), sets a target of reducing out-of-pocket expenditures on health to 32% of total health expenditure and identifies several health financing reforms to move the