Under the multi donor trust fund for khyber pakhtunkhwa and federally administered tribal areas and balochistan



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Institutional sustainability: The project will be implemented by the Health Sector Reforms Unit in the Department of Health. The HSRU has played a vital role in the design and conceptualizing the project and has been identified as the best option to support implementation of this initiative. As part of the design process the project has a built in mechanism for testing new interventions like the contracting out of secondary care hospitals (DHQ). If at the midterm review of the project this component is successful, the idea is to expand the contracts to include DHQ hospitals in all the districts. The project does not envisage setting up of a separate Implementation Unit, and will be managed by the HSRU, this will not only build the capacity of the HRSU to implement similar projects but will also simplify the implementation mechanism as the institutional frameworks and mechanisms are already developed at HSRU and new procedures will not have to be developed/ designed.


Equity and efficiency of current spending


  1. When we look at the financing agents responsible for health expenditure as presented in the National Health Accounts 2005-6, we find that the out-of-pocket expenditure (OOP) varies across provinces and unfortunately is the highest in KP. When we compare this with the actual service utilization statistics we find that the poor use inferior forms of health care (traditional healers, home delivery, and informal providers) to cope with the high OOP. The poor are left out of the public spending and this results in a large gap in availability of services to the poor.


Table 10a.3 Type of Health Expenditure by Province, National Health Accounts 2005-6



The coverage gap is from the countdown to 2015 for maternal, newborn and child survival 2010 report. It consists of aggregation of 8 indicators (CPR, ANC, Skilled birth attendance, (BCG, DPT3, measles coverage), ORT and care seeking for ARI)


Innovative payment system: contracting for services


  1. The payment mechanism for the health services contract is designed to be simple yet incentivize the contractor for improved service delivery. There will be two streams of payment to the contractor: one stream shall be the district budget for the health facilities contracted out and as this is 85 percent salary it will be transferred to the contractor on a regular basis, the other component of the budget which shall be from the HSRU (project funds) shall be released on a sliding scale mechanism based on achievement of agreed indicators. Thus the financing mechanism ensures that the contractor will have a basic amount to cover salaries, utilities, some supplies etc. and then depending on performance would be able to get additional resources for expansion of services. As this is a relatively a new mechanism to finance interventions in the health sector, appropriate resources are allocated for strengthening of the monitoring mechanism of health department to manage these contracts. This move away from input and process based financing would allow focus on achievement of numerical targets/ outputs by the contractor and also focus the attention of the department of health KP on the costs associated with achieving these targets. The contractor would be paid the amount from the project based on services delivered.



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