Budget increases alone cannot fix public healthcare

Government allocation for Bangladesh's health sector has long been inadequate, compounded by weak implementation mechanisms. As a result, our out-of-pocket (OOP) payments for healthcare continue to rise, and access to quality services is becoming increasingly difficult for millions of citizens.

According to the Bangladesh National Health Accounts (1997-2020), nearly 69 percent of total health expenditure comes directly from individuals' OOP payments, one of the highest rates in South Asia. The WHO warns that OOP spending above 30-35 percent poses serious financial risk; Bangladesh's rate is more than double this threshold. In contrast, the government contributes only 22-23 percent of total health spending.

Public health allocation has remained at around five percent of the national budget, reaching just 5.3 percent in FY 2025-26. As a share of GDP, public spending stands at only 0.74 percent, far below the WHO-recommended five percent. Even when public and private health expenditures are combined, the figure is merely 2.34 percent of GDP. Beyond low allocation, implementation inefficiency remains severe as poor planning, weak project execution, and the trend of unspent funds persist. Consequently, poor and lower-middle-income families face growing financial hardship and often avoid necessary care. Ineffective public hospitals—plagued by management failures, staff shortages, inadequate infrastructure, weak supply chains, and medicine shortages—often force patients towards costly private care.

Addressing these systemic weaknesses requires urgent, coordinated, and structural reform. However, restoring a health system long burdened by mismanagement, complexity, and inefficiency first requires answering three fundamental questions: whether citizens are empowered to seek public healthcare services, whether public service providers are adequately motivated and incentivised to deliver services, and whether there is sufficient political will and attractiveness towards investment in the health sector.

Unfortunately, under the current reality, the answer to none of these questions is satisfactory. This failure is closely linked to three critical unknowns: patients remain unaware of the value of the services they receive; providers lack a clear understanding of the value of the care they deliver; and the government does not adequately know the monetary value, or returns, of its spending in the health sector. Addressing these questions and unknowns necessitates a policy framework capable of delivering positive change across all three areas.

First, consider how the public can be empowered to access public healthcare. Citizens are not adequately empowered due to insufficient priority given to health in personal and family life, the absence of health awareness and practical health education in educational institutions, and weak enforcement of the rule of law. As a result, many people do not know when, where, or what kind of healthcare to seek, nor are they fully aware of their rights as consumers of the health system. A lack of confidence in making health-related decisions is also evident.

To ensure access in this context, the public needs an entitlement-based system that effectively empowers them to receive necessary healthcare. Such a system could be operationalised through the introduction of a health card that legally assures citizens' access to healthcare. Each family could be provided with a ceiling-based family health card with a defined annual limit on healthcare utilisation. The card would specify the monetary value of healthcare that a family is entitled to receive annually through public institutions. This would encourage people to return to government hospitals and foster a clearer understanding of the services to which they are entitled.

If a specific service is unavailable in a public institution, it could be provided through selected private facilities via strategic purchasing while maintaining priority on delivery through the public system. In parallel, the ecosystem of public health facilities must be strengthened and made fully prepared for effective service delivery.

At the same time, beyond ensuring regular salaries and benefits, a performance-based incentive system must be introduced for service providers. Complexities surrounding promotion, transfer, and posting should also be reduced so that healthcare workers feel sufficiently motivated to serve the public interest.

Turkey offers a relevant example. Under its Health Transformation Programme, the country introduced a performance-based remuneration system for public healthcare providers, offering bonuses based on staff efficiency and effort. In addition, the government provides location-based incentives of up to 40 percent of salary for those working in regions with low socio-economic development, helping to ensure more equitable deployment of health workers. This integrated incentive package has improved service quality, motivated staff, and enhanced retention, particularly in remote areas.

This leads to the question of how interest in health-sector investment can be strengthened in Bangladesh. Valuing healthcare services is crucial to creating attraction towards such investment. To achieve this, the value of each healthcare service must be determined based on its diagnostic group. Doing so would allow patients to understand the value of the benefits they receive, thereby increasing trust, respect, and loyalty towards public hospital providers. At the same time, service providers and hospital authorities would gain clarity on the value of the services they deliver, enabling them to identify strengths and weaknesses, develop improvement plans, and foster healthy competition within the hospital system to accelerate quality improvement.

The ceiling-based family health card is central to this transformation. When services are accessed through this card, the government can clearly assess the value created for patients. If the value of the service is found to be two to ten times higher than government expenditure, the political importance of investing in healthcare will become evident. If, however, the value is lower than the expenditure, the source of inefficiency can be identified and addressed promptly.

Advancing the health sector primarily requires coordination among three elements: empowered citizens, motivated service providers, and politically valued investment. If this is prioritised and the above conditions are met, the public health system can certainly be revitalised.

Dr Syed Abdul Hamid  is professor of health economics at Dhaka University, convener of Wellbeing-First Initiative Bangladesh (WFIB), and chief adviser of Universal Research Care Ltd.
 

Views expressed in this article are the author's own. 

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