98240 Knowledge Brief Health, Nutrition and Population Global Practice FINANCING THE FRONTLINE: AN ANALYTICAL REVIEW OF PROVINCIAL ADMINISTRATIONS IN PAPUA NEW GUINEA’S RURAL HEALTH EXPENDITURE 2006-2012 June 2015 KEY MESSAGES: • Certainty in cash disbursement is a prerequisite to improved service delivery, yet variability in cash disbursement from Port Moresby to the provinces continues. • There are areas of uncertainty as to who is responsible for what. A working group to review the assignment of rural health functions is needed. • Expenditure on certain priority activities in some provinces appears to have improved. There is a need to understand how this improvement in spending relates to performance. • Provinces with higher levels of own-sourced revenue generally spend lower amounts on frontline health services. Introduction centres are administered by churches (with government funding) and the other half directly by the government. In a country where more than 85 percent of the Most activities associated with frontline rural health population lives in rural areas, developing a sustainable services are the responsibility of provincial approach for assessing the allocation and effectiveness governments; however this picture is changing with the of spending on the country’s rural health service is introduction of provincial health authorities. critical. This report updates the analysis of our first report, Below the Glass Floor, and looks for ways to continue the discussions in search of solutions for the Key questions issues identified. 1. Is there clarity over service delivery Papua New Guinea’s network of rural health facilities is responsibilities? enormously widespread across the country’s Papua New Guinea’s rural health system has many challenging terrain. For most Papua New Guineans participants. Developing an unambiguous agreement of these health clinics, and the extension patrols that clinic service delivery responsibilities is a fundamental staff carry out, are the only health service people see prerequisite in achieving progress. and can access. Roughly half of the country’s health Page 1 HNPGP Knowledge Brief • When ambiguity is present, it often acts like a sinkhole, work may be necessary in this area to better align and fosters a gap in service delivery. funding with those at the frontline who need to spend it (see figure 2 to note the disparities in spending). This is particularly likely when the system itself suffers from low funding and broader capacity constraints. For example, to access funds to support activities at the provincial level, a community health worker would be Our analysis and consultation have highlighted a required to travel the provincial capital. This is often number of key areas requiring discussion and impractical, time consuming and incredibly costly. agreement in terms of service delivery responsibility. These include: the transfer of patients from rural health Thus the transaction costs become very high rendering facilities to facilities with higher levels of care; the service delivery inefficient. Recent anecdotal evidence distribution of medical supplies; the ‘grey area’ between supports the findings of the District Case Study (DPLGA church health and government administration 2009) that, in the absence of ready funding, many responsibilities; activities supporting the provision of facilities revert to user fees to continue operating. clean water to facilities and to communities. Do provinces with higher levels of own-sourced Another important area is that of facility maintenance. revenue support rural health? Facility maintenance can be designated as one of two Not all provinces receive significant operational funding types, either ‘minor’ or ‘more substantial’. The assigning from function grants (See figure 2). Some provinces of responsibility, as well as the location of funding, for a need to fund rural health services largely from their own- specific type of maintenance, is likely to depend on the sourced revenue, that is, internal revenue. The analysis nature or ‘type’ of maintenance to be carried out. The is disappointing. In most cases, provinces with higher appropriate protocol for minor maintenance may well be levels of own-sourced revenue spend relatively less on ill-suited for more substantial maintenance. supporting rural health services. This observation is a 2. Are operational funds reaching service delivery concern. The intergovernmental system relies on own- providers? sourced revenue to support basic services. Is the funding aligned? ‘Getting the money right’ is not only a matter of providing the right amount, it’s also a matter of getting the money to the right place and to the people who ultimately need to spend it. Recent studies and analysis suggest further Page 2 Funding Province Frontline Spending Considering the role of the national level in Profile transferring recurrent grants to support operations. Higher 70% Manus High Grant Certainty in cash disbursement is a prerequisite to Higher 70% improved service delivery, yet the picture of variability in Gulf High Grant cash disbursement from Port Moresby to the provinces Higher 68% East New Britain Mixed continues (see figure 1 above). In 2011, 17 of the 18 provinces received 50 percent of their appropriations by Eastern Highlands Mixed Higher 63% February. This contrasts sharply with 2012, when no Higher 62% West New Britain Mixed operational funds were transferred to support the Medium 52% frontline in January or February. Simbu High Grant Medium 52% East Sepik High Grant 3. Are there visible improvements in the delivery of rural health services? Medium 48% Western Highlands Mixed The findings of the recent Promoting Effective Public Medium 40% Southern Highlands High OSR Expenditure (PEPE_ study—which included a survey of 37% Central Mixed Medium rural health facilities—were sobering. And yet the picture of spending on rural health facilities and outreach from Low 30% New Ireland High OSR provincial expenditure data suggests there has been a 27% Sandaun High Grant Low visible improvement in many provinces (see below). We need to better understand the relationship between Low 27% Oro High Grant expenditure and performance. The availability of 25% Enga High OSR Lower expenditure and performance information allows us to seek greater insight which can guide future Lower 20% Morobe High OSR developments aimed at improving the financial flows Lower 19% and their alignment with key service delivery activities. Madang High Grant Lower 17% Western High OSR ? 12% Milne Bay High Grant Page 3 HNPGP Knowledge Brief • Recommendations provinces in three classifications: first, those provinces with higher levels of own-sourced revenue and hence lower The operating context in Papua New Guinea is highly grants; second, those provinces with lower levels of own- decentralised with many participants. Achieving sourced revenue and hence higher grants; and third, those improvements in the delivery of rural health services will with a more even mix of both. require the following: 2 Frontline Spending Compared To a Cost Estimate: 1. A highly decentralised context with many participants The study groups its findings according to a metric that relies on an unambiguous agreement of service delivery compares spending against a ‘cost estimate’ benchmark of responsibilities. A working group could be convened to what should be spent to deliver a service in a particular clarify functional responsibilities and resolve location. The cost estimate is based on the National uncertainties. Economic and Fiscal Commission’s admirable work The 2. Getting the ‘right amount’ to the ‘right place’ ‘on time’ Methodology and Results of the 2011 Cost of Sub-national Services Study (O&M). needs to be a guiding priority. Budgets and funding streams need to be appropriately aligned to ensure the right amount gets to the right level. The National References Department of Health has conducted exploratory initiatives in using facility-based budgeting and funding. Howes, S., Mako, A. A, Swan, A, Walton, G, Webster, T These findings can be used to inform and develop and Wiltshire, C. 2014, A Lost Decade? Service Delivery national policy. and Reforms in Papua New Guinea 2002 –2012, The National Research Institute and the Development Policy 3. The impact of ‘low funding for rural health’ in Centre, Canberra. provinces with higher levels of own-sourced revenue [GST and royalties] needs to be considered. If rural NEFC. 2013. Government, Money Arteries and Services: health is not suitably prioritised and funded, rural health The 2012 Provincial Expenditure Review, November 2013. services in these provinces will continue to suffer. _____. 2014. The Thin Blue Line: The Methodology and 4. There is a need to continue the dialogue at the Results of the 2011 Cost of Subnational Services Study national level around the timing of grant releases. (O&M), July 2014. Achieving a predictable timely release of funds – from the national level to the subnational level [and ultimate World Bank. 2014. Below the Glass Floor: The Analytical spenders] – is a prerequisite for improved service Review of Expenditure by Provincial Administrations on delivery. Front Line Rural Health (Vol. 2). 5. Effective timely monitoring and reporting is critical in http://documents.worldbank.org/curated/en/2014/01/1891 a highly decentralized context. The relationship between 4308/below-glass-floor-analytical-review-expenditure- subnational expenditure and performance needs to be provincial-administrations-front-line-rural-health-vol-2-2- better understood. There should be a positive main-report correlation between increased spending and [increased] performance activities leading eventually to improved This HNP Knowledge Brief highlights the key findings from a outcomes. study by the World Bank titled “Financing the Frontline: An Analytical Review of Provincial Administrations’ Rural Health Endnotes Expenditure 2006-2012” by Alan Cairns. Please contact Xiaohui 1 Funding Profile: In Papua New Guinea, provincial Hou at xhou@worldbank.org or Alan Cairns at administrations receive their funding from two major alancairns@xtra.co.nz for any queries. sources. The first is from own-sourced revenue, and the second is from national grant transfers. The intergovernmental financing system uses national transfers to contribute to any shortfall in a province’s funding from its own-sourced revenue. This means the mix of own-sourced revenue and national grants vary markedly by province. The concept of a ‘funding profile’ enables us to group ‘like’ The Health, Nutrition and Population Knowledge Briefs of the World Bank are a quick reference on the essentials of specific HNP-related topics summarizing new findings and information. These may highlight an issue and key interventions proven to be effective in improving health, or disseminate new findings and lessons learned from the regions. For more information on this topic, go to: www.worldbank.org/health. Page 4