Appendix 8: Traditional medicine in Bougainville

Appendix 8: Traditional medicine in Bougainville

Specifically, the THP aims to:

contribute to knowledge and appreciation of traditional health resources in Bougainville

contribute to improvement of health parameters, in particular maternal health, in Bougainville

contribute to self sufficiency of Bougainville communities, in particular in rural areas, with respect to basic health

Preserve and continuously upgrade traditional health care knowledge and skills by introducing them into the modern health care system in Bougainville

The Bougainville Traditional Health Association (BouTHA) has been formed since the start of the THP. To date BouTHA has 300 members and 11 smaller associations representing districts or groups of villages. BouTHA’s dream is to strengthen the health service using safe and effective traditional medicine and practices and work with health staff to promote a healthy lifestyle.

In the short time since their inception, the THP and BouTHA have some notable achievements. Specimens from approximately 100 medicinal plants have been collected, analyzed and catalogued in conjunction with University of PNG and the Forestry Research Institute. The information obtained will be used to produce a booklet on medicinal plants used in Bougainville for health centres, schools and the general public. Members of BouTHA have been trained as trainers in primary health care and over 500 traditional healers from all parts of Bougainville have received primary health care training. Bone-setters and massage therapists have received training on human anatomy and physiology. Traditional birth attendants upgraded their knowledge in safe motherhood and delivery. Twelve herbalists are attending a course on rural health management conducted by Divine Word University. Links between BouTHA and the Bougainville Healthy Communities Project (BHCP) have begun to be established. BHCP includes training on herbal medicines as part of the training for volunteers and peer educators. Medicinal herb gardens have been established in primary schools.

In the future, the THP and BouTHA would like to establish more medicinal herb gardens at health centres and primary schools and include traditional medicine in the upper primary school curriculum. They want to establish a research institute and/or laboratory that can determine recommended doses for various herbal remedies. Other ideas include developing a quality control process for herbal medicines as well as techniques for mass production and preservation of herbal medicines. THP and BouTHA want to develop accreditation for traditional medical practitioners and collaborate more with health workers.

Appendix 9: Cost and financing scenarios

Financing issues facing the ABG health sector

Currently, the GoPNG has committed to providing 100 Million Kina per annum financial support to the ABG over a 5 year period. With low levels of internal revenue, this support is most important to the ABG, as the post-conflict recovery and development financial needs are considerable. The ABG has budgeted its plans for the period 2011-2015 to meet certain development priorities, as indicated below.

Currently, it is estimated the ABG generates about 5 million kina per year through taxes. These taxes are collected by the GoPNG taxation system with some returned directly to the ABG, under current agreements. The 2012 and 2015 budgets given in Table 1 assume a significant increase in taxation revenue over the 2012-2015 period. This taxation base includes group tax on wages, a goods and services tax, motor vehicle registration fees, liquor licensing fees, and excise taxes on alcohol and tobacco. The excise taxes are new and the ABG is hopeful of large revenue gains from these taxes into the future.

The GoPNG also provides financial support to the ABG health sector by funding the Buka Hospital, salary support for rural health services, financial support for the Church health services and provision of medical supplies (see below).

There is uncertainty over what level of support would be provided by the GoPNG in the longer term, after a referendum is held to determine if the ABG would continue as an autonomous government within the PNG Government, or as an independent nation.

The estimated recurrent expenditure of the ABG health sector is financed from a number of sources, as given below.

Of this 27.53 million kina estimated recurrent expenditure, ABG directly contributes an estimated 1.355 million kina in recurrent expenditure. The rest is made up of donor contributions (4.90 million kina) and GoPNG funding (21.27 million kina). The GoPNG is by far the major contributor to health sector recurrent funding, and is likely to remain so until sometime between 2015 and 2020. Within this five year period, the referendum has to be held, after which GoPNG funding will be uncertain.

For 2012, ABG is providing 4.5 million kina in capital funding for health infrastructure, as part its 100 million kina per year (for 5 years) grant from the GoPNG.

This consists of GoPNG recurrent funding, and ABG sourced recurrent and capital funding, as indicated earlier.

In the chart below is a comparison of US$ per capita government sourced health expenditures of PNG overall, other Melanesian Pacific countries and ABG. Whilst ABG appears to be higher than PNG overall, it falls well short of the per capita health expenditures of the Solomons, Fiji, Kiribati and Vanuatu.

It should be noted there are limitations to the accuracy of these indicators, as they are dependent on data sourced from each country. However, WHO has gone to some length over at least ten years to standardise data collection and methods of calculation, to allow more meaningful comparisons. There are other methods of comparison which take into account relative purchasing power in each country, but in the interests of not over complicating the comparisons (since they are a guide only) this has not been done in this document. Notwithstanding limitations of inter-country health expenditure comparisons, it is useful to compare government health spending per capita of ABG’s Melanesian neighbours.

The ABG is currently quite close to the US$60 per capita level, which the WHO has determined would provide enough financing for a health system in a developing country to deliver all of the specified mix of interventions to treat conditions to meet the health Millennium Development Goals (MDGs) and interventions targeting non-communicable diseases.²⁰ However, it will be important over time that the ABG tries to increase its government-sourced health expenditure to levels comparable to other Melanesian countries, in order to improve its health services overall, as well as using ongoing workforce and health system productivity gains.
6. Government-sourced health expenditure growth scenarios

Up to 2015, the ABG can rely on its own funds (using the 100 million kina per year GoPNG grant) and GoPNG funds to finance its needs for health and other government expenditures. Beyond 2015, it is uncertain where the sources of government expenditure will come from, and this is dependent on the outcomes of the referendum. At the moment, GoPNG collects tax on behalf of ABG and returns an agreed proportion back to ABG. If ABG remains autonomous, it is uncertain to what extent and how long it will take for overall taxation imposition and collection responsibilities to transfer to ABG. If ABG becomes an independent nation, this date will be reliant on the date of the referendum (between 2015-2020) and the time it takes to totally transfer powers, including all taxation responsibilities. So between 2015 and when there develops a significant revenue stream for the ABG, possibly from 2020 onwards, when the Panguna mine starts to generate revenue, the ABG will need to find a way to finance its government services, including health. If it becomes independent, it can do this partially by taking over taxation powers from GoPNG at the time when PNG stops providing government funding.

With this uncertain context in mind, three financial scenarios for ABG Health are given below. The expenditure figures include both recurrent and capital expenditures.
Scenario 1: Total government sourced expenditure rises only to match population increases – so that per capita expenditure stays constant

Up until 2015, GoPNG have committed 100 million kina to ABG, of which it is understood, the ABG Health division will receive 15%, that is 15 million kina.

In this scenario, expenditure would increase from 2012 to 2013, because of the 15 million kina introduced to the ABG budget in 2013, and this would stay the same until 2015. From that point on, expenditure, it is assumed wholly funded by ABG, would stay at the 2015 level of US$69.12 per capita, but increase with population increases. So whilst the budget would increase by 2.3% per year to 2020 and then by 2.0% to 2030, it would only be rising with population increases and there would be no real per capita increase in expenditure.²¹

Expenditure stays at US$69.12 per capita

This scenario would mean that by 2030, expenditure per capita would still be well below the per capita expenditure of ABG’s southern Melanesian neighbours. These countries range from US$100 to US$143, with a crude average of US$120. This expenditure scenario would in effect mean that ABG Health would remain severely underfunded and would most likely not reach its desired health status targets.

This means ABG would need to have higher percentage annual increases in the first 5 years to achieve the US$100 per capita target earlier. To achieve these expenditure targets, it would require an annual percentage increase in the health budget of 10.14% to 2020, and a 3.87% increase from 2020 to 2030 (as indicated by the more gradual curve in the graph after 2030. Whilst this scenario allows achievement of the US$100 target earlier, it also means a much higher percentage increase in funding in the 5 years from 2015, just in the time period of likely funding uncertainty.

Because the WHO international comparisons of government-only financial sources quoted above use both capital and recurrent expenditures combined, so too does this analysis. This allows projections of target dates for US$100 and US$120 to be developed. However, in practice, capital and recurrent funding needs to be separated. With the steadily increasing overall health budget that Scenario 2 outlines (5.92% per annum) from 2015 to 2030, there is scope to utilise some of the increase for recurrent and some for capital purposes. Because recurrent health expenditures are generally non-flexible downwards (they can only generally rise or stay the same, because of locked in recurrent costs like wages and other program commitments) it is useful to project recurrent costs based on Scenario 2 (5.92% growth) and the 2012 recurrent expenditure estimates. These projections can act as a tool for recurrent expenditure growth using 2012 as the baseline expenditure.

The graph of estimated recurrent health expenditure to 2030 is given below. Between 2012 and 2015, it rises from 28.72 million kina to 36.27 million kina, due to the commitment of GoPNG providing the 15 million kina per annum to ABG and the GoPNG providing most of the recurrent health funding. From 2016, there is a steady 5.92% increase. However, as indicated in the graph, ABG’s contribution will need to rise dramatically from 2015 to 2016, from 8.093 million kina to 38.42 million kina, to replace the loss of 21.27 million kina which up until then would be provided by GoPNG. This situation would arise if ABG was an independent nation from 2015 onwards. This may or may not be the case, but this assumption has been made in this document to indicate the possibility of the most critical funding situation occurring. ABG needs to prepare for such a possibility, given that a referendum could occur as early as 2015.

Note – See Table below for inflation adjusted data.

Capital funding spending can be projected in a similar way using the 2012 government sourced capital funding estimate as a base. However, this baseline figure for 2012 of 6.093 million kina may or may not be appropriate, and given the need to upgrade health facilities over the next few years, it is probably inadequate. However, the capital funding projections could act as the minimum required per year to ensure the total government sourced expenditure (recurrent and capital) reaches the US$120 per capita target by 2030.

Note – See Table below for inflation adjusted data.

Inflation rates within an economy are an indication of rising prices but not extra resources, whether they be staffing, operational costs, medical supplies, transport and other recurrent expenses. Because of inflation, the same resources cost more, and that is why expenditure data needs to be adjusted by the inflation rate, which is a crude average of the rise in prices of the same number of goods and services.

In the graph and table below, the recurrent and capital expenditure increases projected to 2030 at 5.92% per year, in order to reach a total expenditure target of US120 per capita, have been adjusted for inflationary price increases. These are the increases which can be used to guide recurrent and capital budget increases into the future to achieve the US$120 target by 2030. However, the figures are a guide only and should be treated within the context of the objectives of the Health Plan, taking into account over time emerging funding requirements and the limits of funding availability.

For the purposes of the projections a long term 6% inflation rate is used.²²

It will be important to further develop the accounting and finance capacity of AGB Health by employing and/or training a suitable person to oversee and manage the ABG health sector finance system. Ideally, this person would be a qualified accountant, eligible to be a member of one of the professional accounting bodies recognized in PNG. This would normally require at least a diploma in accounting or business studies with major studies in accounting. It would also be useful for this person to have some training in economics. This person could service the health sector by either working in the overall administration of ABG, but dedicated to the health services, or working specifically within a proposed health department, whichever structure may emerge.

This table is provided as an accompanying excel spreadsheet. (Health Commitment Table to 2030.xlsx ) It can be used as a finance planning tool for ABG Health. The table indicates on an annual basis the funds available for planned increases in recurrent and capital expenditures, and what available funding can be carried forward for later years. It is a flexible Excel table and can have different financial inputs to the ones utilised currently.

It assumes that funds available in 2012 are fixed and committed. From 2013 to 2015, the recurrent funding increases as a result of the 15 million kina made available and committed to ABG Health from the ABG.

This forms the basis of committed funding at 2015.

From 2016 onwards it is assumed there will be no more funding from GoPNG and that all funds are from the ABG. It is also assumed that from 2016 onwards this funding will increase by 5.92% per annum to 2030. This funding can be used for recurrent or capital spending.

Increased expenditures as per the Health Plan priorities are then matched against these steady annual increases in funding. These expenditures are included as sufficient funding becomes available.

It is assumed that when recurrent expenditures are included, they then form the basis of an increased recurrent expenditure base (i.e they stay in the recurrent budget in following years).

When capital expenditures are included, they may be included partially over a number of years, depending on funding available each year, or if small enough they are completed in one year.

When capital expenditures do span more than a year, related recurrent funding is added partially over those years to reflect the amount of the project completed and operating.

When a capital expenditure is completed by the end of a year, it is assumed that the full recurrent spending relating to it will occur in the following year and will then continue annually.