We begin the discussion with a comment on the scope of the paper. The paper does examine recurrent government recurrent expenditure. It therefore leaves out government development expenditure. It also leaves out expenditure that is not done through the government medium expenditure framework (MTEF), that is, the off budget expenditure. This off budget expenditure is done mainly by development partners and non-government organizations. The proportion of the government recurrent expenditure to the total expenditure of the sector is difficult to estimate. No data is collected either for the non-government organizations or for the development partners. However, analysis of recurrent expenditure in itself is a an important aspect of understanding government priorities.
Simultaneous changes as part of the implementation of the policy are noteworthy. A one off capital investment for Primary Health Care was made four years into the implementation of the policy. Capital expenditure increased from Ushs 10.6 billion in the 2001-2002 financial year to Ushs 75.8 billion shillings in the next financial year (2002-2003) - Based on analysis of the mid-term expenditure framework. This investment enabled further expansion of health centers with an additional 400 HCIIs. In addition, the recruitment of health workers was re-instituted in 2001. By mid 2002, more than 85% (2,538) of health workers under the Poverty action funds targeting PHC services had been recruited.
The sector wide analysis has shown an increase in recurrent expenditure largely accounted for by increase in the wage component while the non wage recurrent remained fairly constant. The noted increase in the wage bill may be explained by several reasons, increase in salaries, adjustment for inflation and recruitment of more health workers. We note that increase in public servants wages have been very modest, for example, between 1999 and 2002 wages grew by 4.8% per annum while between 2002 - 2007, average monthly earnings only increased by 13%. Inflation was maintained below 8% between 2000 and 2008. Percentage of approved posts filled by trained staff in the health sector improved from 33% in 1999/00 to 69% in 2004/05 and given this, increase in number of health workers accounts for the increasing wage bill.
The availability of human resource without adequate inputs affects quality of care and leads to further loses, having to pay salaries for health workers who are not providing services. Underfunding other key inputs has affected service delivery, for example, medicines stock outs is a long standing problem. The percentage of health facilities registering stock outs in essential medicines has consistently been over 60% for the last 10 years [11–13]. Per capita expenditure on essential medicines and health supplies has remained below US$2 per capita for the last six years [11–13, 17–19]. Functionality of available equipment ranges from as low as 33% at the general hospital level to 52% at the Health Centre four (HC IV) level. Available investments cannot be put to optimal use.
Looking at recurrent expenditure by level, the policy decision of capping of expenditures at tertiary level hospitals, which were viewed to serve a small urban population was achieved. Similarly, the high and increasing recurrent expenditure at the district level shows that the policy decision to target peripheral units serving mainly the poor was also met. Eighty percent (80%) of the population live in rural areas and poverty is more prevalent in rural areas compared to urban areas However, expenditure at the national level health institutions remained the lowest and constant over the review period. These institutions offer support services and their proper functioning is crucial for realization of PHC provision. As a result of underinvestment in these institutions, key aspects of PHC have not been effectively provided. Inadequate blood transfusion services for example have affected delivery of emergency obstetric care services. The mid-term review report noted the markedly inadequate and poorly furnished blood transfusion structure and lack of enough blood supply. Out of the seven recommended regional blood banks, only five are in place with no expansion made for the last three years. Operations of the Health service commission, charged with the responsibility of establishing an efficient health workforce continue to be constrained. Occasionally, funding for the wage bill has been returned to the treasury because of failure to recruit health workers.
The patterns of expenditure within hospitals and health centers have been analyzed. We have noted that between 2000/01 and 2001/02, at the hospital level, there was a reduction in the wage and an increase in the non wage recurrent while at the health centre level, there was a reduction in the non wage recurrent and an increase in the wage. This has affected availability of essential supplies, for example, percentage of health centre IIs experiencing stock outs of essential medicines has been close to 80% for the last 3 years compared to the national average of close 70%. Only 52% of HC II were able to provide antenatal care compared to hospitals at 95% . Percentage of HCIIs, offering child immunization with all equipment available, was only 55% compared to hospitals at 90%. Preferential investment in wage at the expense of the non wage recurrent at HC level has affected service delivery at this level with resultant congestion at hospitals of cases that could be treated at lower levels. Similarly, evidence suggests that human resource utilization is suboptimal when investment in other areas like of the capital (i.e. medical equipment, etc.) is inadequate. They recommended that reorientation of the resource allocation towards the capital investments would save more lives .