EXTERNAL ASSISTANCE FOR HEALTH SECTOR: TRENDS AND …cmdr.ac.in/editor_v51/assets/mono-47.pdf · 2. Economic Reforms and External Assistance: General Trends in the Indian Context

External Assistance For Health Sector : 1

CMDR Monograph Series No. - 47

EXTERNAL ASSISTANCE FOR HEALTHSECTOR: TRENDS AND IMPACT DURINGECONOMIC REFORMS, WITH A SPECIAL

REFERENCE TO ORISSA

Dr. Manoj K. DashDr. Arabinda Mishra

As part of the Project :

ECONOMIC REFORMS, AND HEALTH SECTOR IN INDIA

Under the aegis of

United Nations Development Programme (UNDP)

and Government of India

CENTRE FOR MULTI-DISCIPLINARY DEVELOPMENT RESEARCHJubilee Circle, DHARWAD-580001, Karnataka, India

Ph : 091-0836-2447639, Fax : 2447627E-mail : [email protected]

2 CMDR Monograph Series No. - 47

1. IntroductionExternal assistance to the Indian

health sector is not new. Considering theunder-developed nature of health servicesin many parts of the country, major externaldonor agencies with a strong health sectorcommitment have been assisting in areas thatrange from systemic processes/institutions(like increasing infrastructure for primaryhealth care, improvement of second-tierhealth system, etc.) to specific disease-oriented interventions (like eradication ofleprosy and tuberculosis, blindness control,HIV/AIDS control, etc.).

1.1 Statement of the Research Themeand Its Relevance to Economic Reforms

From the discussions that follow, itwill come to one’s knowledge that during1990s, the number of external agenciesmaking health sector intervention in India, atboth the national and state levels, steadilyincreased. Correspondingly, the volume offunds from these external sources has grownsubstantially. Immediately, the question thatcomes to one’s mind is that why this hashappened and whether there a link betweenthe economic reforms process in the countryand the increase in external assistance forthe social sector. Going further, one wouldbe interested to know whether there has

occurred any perceptible improvement in theperformance of the sectors that have beenexternally assisted in a major way during thereforms period? In case of the social sectors,where it is hard to evaluate performance inquantitative terms, has there been any changein service quality or delivery mechanismbecause of externally assisted projects? Hasthis led to any improvement in crucialprocess-related and performance indicators?Do the external donor agencies set anypriorities before giving funds to the stategovernments? How the funds from the donoragencies flow to the states? Considering thefocus of the present study, the aboveconcerns translate themselves to the basicresearch theme of an analysis of the trendsand impacts of external assistance to thehealth sector during the economicreforms period, i.e. the post 1991 scenario.The analysis is almost exclusively based onthe experiences of the health sector in Orissa.Besides being one of the least developedstates in the country, the experience ofOrissa is unique in the sense that it hasreceived a lot of attention from a majordonor agency and that this involvementon the part of the donor so far covers aperiod of over 20 years and it willcontinue at least for another 7 years.

EXTERNAL ASSISTANCE FOR HEALTH SECTOR: TRENDSAND IMPACT DURING ECONOMIC REFORMS, WITH A

SPECIAL REFERENCE TO ORISSA

Dr. Manoj K. DashDr. Arabinda Mishra


1.2 Methodology, Objectives andOutline of the Study

The data and information for thisstudy has been generated from secondarysources, interviews and discussions.Secondary sources include Annual Reportsof the Union Ministry of Health and FamilyWelfare, Evaluation Reports of VariousHealth Sector Projects in Orissa, ExternalAssistance Brochure of the Department ofEconomic Affairs, Family Welfare Yearbookof the Union Ministry of Health and FamilyWelfare, etc. A number of health sectorprofessionals – medical and non-medical –were contacted to gather a lot of unwritten/unrecorded information. With Orissa as thestate under reference, the specific objectivesof the study are:i. To identify the sources of external

assistance to Orissa’s health sector andthe procedure and steps involved withobtaining external assistance;

ii. To analyse the trends in the flow ofexternal funds during the reforms periodas compared to that during pre-reformsperiod;

iii. To highlight reforms period ‘shifts’, ifany, in approaches of donor agenciesfor assisting the health sector of Orissa;

iv. To profile linkages between economicreforms, external assistance and healthsector reform initiatives, if any, duringthe last decade at the state level; and

v. To evaluate the impact of externalassistance on the health sector of thestate in terms of selected input andoutput indicators.

It is very important to mention herethat detailed information pertaining toexternally assisted projects/programmes ishard to obtain, particularly at the state level.There is one External Assistance Brochure(2000-2001) prepared by the Departmentof Economic Affairs (DEA), Ministry ofFinance, which claims to have given theinformation pertaining to all the projectssupported by external assistance source-wise since the first Five Year Plan. But thedifficulty is, the amount of grant/loan givenby each agency/country has been reflectedin terms of its own currency (say, Dollar orYen or Franc). Thus, for any year, acomparison of the levels of assistance fromdifferent countries/agencies requires aconversion of the stated amounts to rupeeterms, which in turn, needs the data relatingto the exchange rates of rupee in terms ofdifferent currencies for that particular year.Moreover, though this Brochure claims thatdata pertaining to all externally assistedprojects has been profiled, it is actually notso. The researchers have found out at leasta couple of cases where particular externallyassisted projects have not been mentionedin the document.

One would usually expect that eachyear’s Annual Report of the Union Ministryof Health and Family Welfare would profilethe amount of external assistance given tovarious States for different projects duringthat particular year. But there has been noattempt by the Ministry to give data in acoherent form. Although some data is given,


the presentation is very confusing. In fact,when one of the researchers approached one‘Section Officer’ (International HealthDivision) of the Ministry to obtain some data,the ‘Section Officer’ advised the researcherto approach the DEA and confided that inorder to answer a relevant ParliamentQuestion, they themselves had to approachthe DEA. Although the ‘Officer’ showedsome data on external assistance obtainedfrom the DEA, he refused to part with it citingbreach of secrecy. Actually, many officialssitting at various ministries show a verydifficult attitude in sharing information thatshould by all accounts be in the publicdomain. But there are a few who offeredready help.

Collecting data on Orissa’s healthsector initiatives was a very difficult affair.Maintenance of records or documentinginformation is a great problem in the Stateand even if some information is available,the custodians of such information struggleto share it. But some good people in theGovernment set up gave very encouragingresponse and shared some of the availableinformation.

2. Economic Reforms and ExternalAssistance: General Trends in theIndian Context

If one glances through the ExternalAssistance records of the Department of

Economic Affairs, Ministry of Finance andAnnual Reports of the Ministry of Health andFamily Welfare, one would come to knowthat prior to the launching of the economicreforms programme in India1 , only a fewcountries provided financial assistance forhealth sector projects in the country. Notableamong them are, Denmark (DANIDA),United Kingdom (ODA/DFID) and theUnited States of America (USAID). But thenumber of countries investing in the healthsector of India has increased after theeconomic reforms programme in India tookoff in a big way in the early part of the 1990s.Now, countries like Canada, Germany,Japan, Netherlands, and the European Unionhave come forward to fund health sectorprogrammes in our country. Internationalagencies, especially those belonging to theUN System, like the WHO and theUNICEF always invested in the health sectorof India as they are doing now. However,WHO operates only through the Ministry ofHealth & Family Welfare, Government ofIndia, while UNICEF operates through theMinistry of Health & Family Welfare of theCentre and the States, Department ofWomen and Child Development of theCentre as well as of the States and alsothrough NGOs at the national and statelevels.

2.1 Trends in the Flow of ExternalAssistance

Table-1 presents a summary picture

1 The present study takes 1991 as the dividing year to distinguish between the pre-reforms and

reforms periods. Though the roots of the reforms process in India can be traced way back to the 1970s,it is generally accepted that comprehensive and large-scale structural adjustment measures wereintroduced in 1991.


relating to the loan component of the year-wise external assistance flows to the accountof the Central government from all sourcesfor the period 1991-92 to 2000-2001.While the summary table does not provideany sector-specific particulars, still there isenough information to draw some importantinsights on the general trends in the flow ofexternal assistance to the country. First, it isimportant to note that, for the period 1991to 2001, the grants component of externalassistance relative to the loan part shows aslowly declining trend in the country (Figure-1). This may be representative of the donoragencies’ attempts to apply a squeeze onthe softer side of their assistance to thecountry during the reforms period. An issuethat emerges out of this for further researchis that whether the external donors havefollowed a pattern in this regard, and if so,which are the sectors that have beenfavoured or discriminated against.

The second insight that one maydraw from Table-1 relates to the trend inthe average interest rate in the last decade.From a level of 4.17 in 1991-92, the averageinterest rate on the external loan assistanceto the Government of India is seen to haveexperienced an almost continuous decline tothe level of 2.53 in 2000-2001. While thismay have acted as an incentive for the centralgovernment to give the go-ahead signal tothe state governments or central-lineministries in their quest to try for more andmore external assistance over the years, oneshould also take note of the simultaneousdecline in the average maturity (in terms ofyears) on new loan commitments by thedonors (Table-1).

Sector-specific data on the centralgovernment’s disbursement of loans andgrants obtained from external sources arepresented in Table-2. Unfortunately, for the

Figure-1: Trend in the Grants/Loans (%) Indicator of

External Assistance to India from 1991-92 to 2000-2001

0

2

4

6

8

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12

14

16

91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00 00-01

Year

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%)


social sector, the data is available for all theservices taken together and hence, there isno way to analyse the trends in the flow ofexternal funds to the health sector inparticular. Still, it is interesting to note thatduring the reforms period, external assistanceto the social sector as a whole has increasedsharply, particularly in the later half of the1990s. In Figure-2, the annual disbursementof external assistance to social sector (as %of the total annual disbursement of externalfunds) for the period 1991-92 to 2000-

2001 is compared with similar percentagefigures derived for the energy andinfrastructure – two major non-social sectorsto have benefited from external assistance.As the trend lines corresponding to the threesectors reveal in Figure-3, during the reformsperiod, the social sector has experienced adramatic increase in the external fundsdisbursed to it as against the declining trendin case of the energy sector and relativelyslowly increasing trend for the infrastructuresector.

Figure-2: Sector-w ise Disbursem ent fo External Funds from 1991-92

to 2000-2001

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Figure -3: Trends in Sector-w ise Disburs em ent of Exte rnal Funds

from 1991-92 to 2000-2001

(…..Energy; _ _ _Infras tructure ;____Social)

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2.2 External Assistance to the HealthSector in India

Besides the increase in the numberof external donors providing assistance tothe health sector in the country, there hasalso occurred a significant increase in therange of their activities within the sector itself.This is illustrated with reference to one majordonor agency – the World Bank. Prior tothe 1990s, the World Bank had providedhealth related assistance to only one project(which was implemented in several phases)in India in the name of India PopulationProject (IPP). The Bank’s assistance underthis programme is still continuing and so far9 such projects have been completed invarious states and cities like West Bengal,

Delhi, Karnataka, Maharashtra and TamilNadu. However, it is very interesting to notefrom the available records (Table-3) thatafter the launching of the economic reformsprocess in India, the Bank (through its humandevelopment wing – IDA) has startedfinancing a number of national level projectslike Child Survival and Safe MotherhoodProgramme, AIDS Control Programme,Family Welfare (Urban Slum) Project,Cataract Blindness Control Project, LeprosyElimination Project, Secondary Level HealthSystems Development Project (in 8 States),Malaria Control Project, Reproductive andChild Health Project and Woman and ChildDevelopment Project.

Sl. No. Name of Project Year1 IPP-I 19722 IPP-II 19803 IPP-III 19844 IPP-IV 19855 IPP-V 19886 IPP-VI 19897 IPP-VII 19908 Integrated Child Development-I 19909 Child Survival & Safe Motherhood 199210 National AIDs Control-I 199211 Integrated Child Development-II 199312 IPP-VIII 199313 IPP-IX 199414 Family Welfare (Urban Slum) 199415 National Leprosy Elimination 199416 Cataract Blindness Control 199417 AP Health System Development 199418 Karnataka Health Systems Development 199619 National Malaria Control 199720 Reproductive & Child Health 199721 Orissa Health Systems Development 199822 National AIDS Control-II 199923 Women & Child Development 199924 Maharashtra Health Systems Development 1999

Table–3: World Bank Aided Health Sector Projects in India over the Years

Source: Brochure on ‘External Assistance’ 2000-2001, Ministry of Finance, GoI.


The flows of external assistance tothe health sectors in different states of thecountry differ in terms of (i) the number andprofiles of the donor agencies involved; (ii)the magnitude of assistance; and (iii) the rangeof activities/systems assisted within thesector. It would be enlightening to know thespecific influences working on a donoragency’s decision to invest in the healthsector of a particular state/region. In theabsence of any specific information on this,the next best thing would be to study thepatterns of external assistance at the statelevel over a period of time by a particulardonor and from it to draw certain pertinentinsights. In this context, it is thought useful topresent a comparative picture of the trendsin external assistance to the health sectorsof three states of the country – Maharashtra,Karnataka and Orissa – which differsignificantly from each other in terms of thelevel of economic development. WhileMaharashtra ranks among the mostdeveloped states in the country in terms ofits per capita State Domestic Product(SDP), Orissa comes across as one of theleast developed and Karnataka in the middlecategory on the basis of the same

development indicator. It is thought relevantto examine the possible links betweenexternal assistance to a social sector suchas health and the level of development of astate.

Table-4 gives the details of healthsector projects implemented with externalassistance in the three states, i.e. Orissa,Karnataka and Maharashtra. It is veryimportant to mention here that the projectsgiven in Tables-4 & 5 have been carried outwith the help of the respective sponsoringagencies directly in the three states.However, external assistance routed throughthe Ministry of Health & Family Welfare,Government of India in the form of CentralAssistance are also provided to the statesthrough normal budgetary support. This kindof support has especially been provided incase of National Programmes like PulsePolio, TB Control, Leprosy Control,Blindness Control, etc. However, it was verydifficult to track the external assistance datafor individual states with respect to theNational Programmes, because it has notbeen reflected in any relevant governmentdocument.


Project

Cost(in Rs.

Crores)

1 World Bank IPP – I Karnataka 5 9.83 1973-802 USAID - Maharashtra 3 15.83 1980-86

3 ODA (UK) OHFWP – I Orissa 5 33.67 1980-874 World Bank IPP – V Maharashtra Mumbai 71.45 1988-96

5 ODA (UK) OHFWP – II Orissa 5 77.25 1989-966 World Bank IPP – VIII Karnataka Bangalore 39.23 1993-98

7 World Bank IPP – IX Karnataka State-wide 114.75 1994-20018 UNFPA - Maharashtra 5 38.36 1989-96

9 KFW & GTZ

(Germany)

- Maharashtra 4 47.9 1996-2001

10 DFID OHFWP – III Orissa 2 23.3 1997-200211 World Bank Secondary Health

System Programme

Karnataka State-wide 546 1996-2001

12 UNFPA IPD Maharashtra - 33.67 21-12-98

Onwards13 UNFPA IPD Orissa - 25.2 04-06-99

Onwards14 World Bank RCH Orissa 1 15 -15 World Bank RCH Karnataka 1 15.05 -

16 World Bank RCH Maharashtra 1 13.78 -17 KFW

(Germany)

Sec. Hosp.

Programme

Karnataka 4 45 1997-2002

DANIDA

(Denmark)19 World Bank Secondary Health

System Programme

Orissa State-wide 41.6 1998-2003

20 World Bank Secondary Health

System Programme

Maharashtra State-wide 72.7 1999-2004

Source: Annual Reports of 1996-97 & 2000-01, Ministry of Health & Family Welfare, GoI.

31.95 -

Table–4: Details of Externally Aided Health Sector Projects (completed and on-going) in Orissa,

Karnataka, and Maharashtra

18 T. B. Programme Orissa -

No. of

Districts

Period of

Operation

Completed Projects

Ongoing Projects

Sl. No.

Name of

Donor

Agency

Name of Project State


Sl. No. Name of Donor State No. of Projects

Karnataka 5

Orissa 2

Maharashtra 3

2 USAID Maharashtra 1

3 ODA/DFID Orissa 3

Maharashtra 2

Orissa 1

Karnataka 1

Maharashtra 1

6 DANIDA Orissa 1

7 6 Donors 3 States 20 Projects

5 KFW & GTZ

Table – 5: Donor-wise Break-up of Externally Aided Health

Sector Projects in the 3 States (completed and on-going)

1 World Bank

4 UNFPA

2.3 Procedure and Guiding Principles forGetting External Aid and Role ofCentre & States

The procedure for getting externalassistance has remained the same over allthese years. For availing external assistance,the procedure is the same irrespective of thenature of assistance (loan or grant) or thenature of the recipient organization (State/Central Government Ministry or PSU). Theproject proposal has to be initiated by therecipient organization. After necessaryclearances from the Planning Commissionregarding inclusion of the project/scheme inthe Plan, the proposal is sent to DEA withrecommendations of the Central LineMinistry for taking up with the externalagency.

In case of a scheme or project ofthe State Government, the Government ofIndia (GOI) takes the loan or the grant andpasses it on to the State Government in theform of Additional Central Assistance(ACA) for Externally Aided Projects. Therepayment liability to the external agency isthat of the GOI which bears the entire foreignexchange risk. For normal category states,the ACA is given in the form of 30% grantand 70% loan. The loan part of ACA atpresent carries interest rate of around 11–12 % and is repayable over 20 years by theState Govt. For special category states (N-E states, J&K, etc.), ACA consists of 90%grant and 10% loan. For the schemes ofCentral Line Ministries, the funds arereleased in the form of grants only and therepayment to the external agency is done bythe Ministry of Finance.


The Central Health Ministryimplements programmes like MalariaControl Programme, National AidsProgramme, etc. as national programmesand the funds in this regard flow to the StateGovernments in the form of grant. However,the implementation of these schemesgenerally involves a state government’s share.There is no difference on the terms andconditions of ACA being given to the stategovernments for externally aided projects indifferent sectors.

3. Orissa’s Health Sector at a Glance

3.1 Development of the Public HealthServices System in Orissa

Prior to the establishment ofallopathic hospitals in Orissa in the early 19th

century, people generally had either noaccess or were reluctant to accept modernmedical systems due to educationalbackwardness and blind beliefs regarding

infectious diseases. Witchcraft and sorcerywere rampant. However, Ayurveda playeda vital role in more systematic treatment atthat time. A network of hospitals anddispensaries doing primarily curative workusing modern medicine existed beforeindependence. The hospitals were under thedistrict boards. The growth of modernmedical institutions in a more widespreadmanner and the increasing faith of the peoplein modern systems happened afterindependence.

The State of Orissa was formed on1st April 1936 and had only 6 Districts atthat time. The Public Health Act and Rulesof Madras Presidency were in force till 1939in the southern part of Orissa. The majormilestones in the development of healthservices in Orissa from 1939 onwards arepresented in Table-6 below

YEAR EVENT1939 Orissa Service Code in force. Post of Director, Health

Services and cadre of Civil Surgeons established.1944 Cuttack Medical College established.

1959-60 Burla Medical College came into being.1962-63 Establishment of Berhampur Medical College.

1964 State Family Planning Officer post created; basic health

services scheme introduced.1970 Registration of Birth and Death Rules came into force. It

became the responsibility of the Health and Family Welfare

Department.1977 1/3 of PHCs converted to upgraded PHCs. Ayurvedic and

Homeopathic Doctors attached to the upgraded PHCs.

1981 Phase – I of External Assistance by Overseas Development

Assistance (ODA), United Kingdom.1985 Dispensaries converted to single doctor PHCs.1989-90 Phase - II of External Assistance by Overseas Development

Assistance (ODA), United Kingdom.1997 Phase – III of External Assistance by Overseas Development

Assistance (ODA), United Kingdom.

Table– 6: Milestones in the Development of Health Services in Orissa

The total number of health institutions(allopathic) is 1702 which includes 3Medical College Hospitals, 31 Districtheadquarter hospitals, 157 CommunityHealth Centres, 1351 Primary HealthCentres (old & new) – as per 1997 data.The Doctor (in government service) topopulation ratio is 1:7440 and the populationserved per medical institution is 21,600.

Public sector expenditure on healthis about 1.2% of the Gross State DomesticProduct and about 3% of the annual budget.A large proportion of the funds is spent onthe tertiary sector. The sustained increase inthe wage and salary component in the healthbudget has made the non-salary portionshrink over the years.

3.2 Health Performance of the StateOrissa’s population (provisional)

according to the 2001 census is 36,706,920,which is 3.57% of the country’s population.The state appears to be close to achievingpopulation stabilization with an annualgrowth rate of 1.59% (2001 Census), asagainst the all-India growth rate of 2.13%.The Crude Birth Rate (CBR) has declinedsubstantially from 34.6 per 1000 populationin 1971 to 33.1 in 1981 and 24.1 in 1999(rural: 24.6, urban: 20.3 and all-India: 26.5).The gender ratio (females per 1000 males)of 972 (in 1991 and 2001) comparesfavourably with the national level figure of933. Life expectancy at birth for 1996-2001is projected as 58.30 years (58.5 years formales and 58.1 years for females), which is

below the national figure of 62.90 years, butstill marks an improvement for the state fromthe 1981-86 figures of 54.1 and 51.9 yearsfor males and females, respectively. TheMaternal Mortality Rate (MMR) is 367 inthe State whereas the corresponding nationalfigure stands at 407 (SRS, 1999). Thepercentage of children fully vaccinated is63.4 as against the national figure of 63.3(ICMR, 1999).

As against the above achievements,issues of concern still persist. While the InfantMortality Rate (IMR) in the state hasdeclined from 135 in 1981 to 97 in 1999, itis still the highest in the country, much abovethe national average of 70. Infant mortalityaccounts for nearly one-third of the totaldeaths during a year. The major causes ofinfant mortality are associated withprematurity, birth injuries, diarrhoea andcongenital malfunctions. In the case ofmaternal mortality, the most important causeis identified to be delivery relatedcomplications.

The disease burden in the State ishigh, but when considered along withindicators of nutritional status among womenand children, there is reason to believe thata substantial proportion of morbidity andmortality is preventable. Communicable,pregnancy related and childhood ailmentsaccount for about 65% of the diseases.Rural-Urban differences remain in the statewith respect to many of the health indicators(for instance, in 1999, rural IMR was 100

as against the urban IMR of 65; similarly,while the rural CDR is 11.1, the urban CDRstands at 7.1).

3.3 State Health Administration: ExistingStructure

The Minister, Health and FamilyWelfare, is in overall charge of the State’shealth administration. The Secretary, Healthand Family Welfare, is the Chief Executiveof the Department. The Secretary advisesand guides the Minister in all major policyand administrative decisions.

The Department is divided into sixseparate Directorates, each headed by aDirector. The Directorates are Directorateof Health Services (DHS), Directorate ofFamily Welfare (DFW), the Directorate ofMedical Education and Training, the StateInstitute of Health and Family Welfare(SIHFW), the Directorate of Indian Systemsof Medicine and Homeopathy (ISMH), andthe Office of the Drug Controller (DC). Atpresent, medical professionals head all theDirectorates, except the last two. TheDirector, ISMH, is a person withadministrative background and the DC is atrained professional in Pharmacy.

The DHS is the ‘Chief TechnicalAdvisor’ to the State government on mattersrelating to preventive and curative healthservices at the primary and secondary levelsand is responsible for supervision, monitoringand implementation of all health activities inthe State. The SIHFW imparts health

education to all kinds of professionals andin-service training to paramedics.

At the District level, the ChiefDistrict Medical Officer (CDMO) is the headof the District health administration and isassisted by 3 Assistant District MedicalOfficers (ADMOs) and occasionally, byother Programme Officers.

At the Block level, the health careactivities are looked after by the CommunityHealth Centre (CHC) Medical Officer orthe Medical Officer of the Block PrimaryHealth Centre (PHC). She/he is assisted bya team of doctors, paramedical and ancillarystaff. The CHC or the Block PHC is usuallyset up for a population of approximately80,000 to 1,20,000. Below the CHC orBlock PHC is the single doctor institutionknown as the Primary Health Centre (New).This is meant to cater to a population of30,000 in plain areas and 20,000 in tribaland hilly areas. Below the PHC (New) areseveral Sub-centres. Each Sub-centre,which is set up for a population of 5000 inplain areas and 3,000 in tribal and hilly areas,is staffed by paramedical professionals, viz.a female Multipurpose Health Worker(MHW) or Auxiliary Nurse Midwife (ANM)and a male MHW.

4. Flow of External Assistance to Orissa

Funds from foreign donor agenciesare routed to the state government throughthe Govt. of India in the form of Additional


Central Assistance (ACA)2 and constitutean important segment of the State Plan. Likenormal State Plan Assistance, ACA consistsof 70% loan and 30% grant. Irrespective ofthe rate of interest charged by the donoragencies to Govt. of India, the loancomponent of the ACA carries the same rateof interest as the loan component of thenormal State Plan Assistance (which, atpresent, carries the rate of interest of 12.5%per annum). Some of the external assistanceis on nominal interest ranging from 0.5 – 4%,but the state government has no way ofbenefiting since the central governmentcharges the same rate of interest on all typesof assistance.

4.1 External Aid Flow to the HealthSector of Orissa in the Pre-reforms Period

The Ministry of Health and FamilyWelfare, Orissa prepared a plan in 1980 toincrease and strengthen facilities for thedelivery of Health and Family WelfareServices in an integrated manner inaccordance with the approach outlined inthe Sixth Plan (1980–85). According to theSixth Plan, the strengthening of infrastructurewas perceived as the main key toachievement of various health goals in thecountry. Accordingly, a plan was made toachieve the goal of better infrastructure in

some selected districts of major States withina period of five years. These selectedinterventions came to be known as ‘AreaProjects’. For achieving this, partialassistance from International/Bilateral donoragencies was sought.

The ultimate objectives of theseprojects were to improve Health andFamily Welfare infrastructure in theseareas, which was thought to contributeto reduction in fertility, maternal andchild mortality and morbidity. In Orissa,the project was operated in the name ofOrissa Health and Family Welfare Project(OHFWP) and was assisted by theOverseas Development Assistance (ODA)of the United Kingdom, which has nowbecome the Department for InternationalDevelopment (DFID).

4.1.1 Phase I of ODA Assistance (1981-88)

The first donor agency to come toOrissa for providing assistance forimprovement of infrastructure was the ODA.In the first phase of the ‘Area Project’ plan,five districts of Orissa out of a total of 13districts were selected. These districts were:Cuttack, Ganjam, Kalahandi, Phulbani andPuri.

2 Important projects assisted by major donor agencies (such as, the World Bank, Japan Bank forInternational Cooperation, Kreditanstalt fun Wiederaufbau of Germany, etc.) are usually financed bythe state government initially, and on the basis of eligible expenditure, reimbursement is claimed fromthe Govt. of India. The amount so reimbursed is called Additional Central Assistance.


In this project, infrastructure wasgiven the major thrust3 although someresources were devoted to training ofpersonnel, strengthening of referral systemat the primary level, i.e. from PHCs toCHCs, and putting a ManagementInformation System (MIS) in place.

For building of infrastructure at thePHC and Sub-centre level (1,400 buildingswere built or upgraded during this phase),the State’s Public Works Department(PWD) was given the responsibility. Mostof the construction took place in 1986-87,almost coinciding with the end of Phase I4 .But due to lack of supervision and monitoringof the work done by the PWD, the buildingswere of very poor quality and there wasrampant pilferage of resources at the locallevel. Another disturbing feature of thebuildings was their location. The HealthDepartment decided that the buildings areto be built on available government land orby purchasing land from the private parties.Ultimately, when the buildings wereconstructed there were no takers for theinfrastructure because they were located atplaces, which the users did not like. At the

PHC level, wherever the staff quarters werenot built around the PHC, the staff of thePHC faced difficulty in attending the centresbecause of lack of convenient transport ordistance from their place of residence. Atthe Sub-centre level, the ANMs found it verydifficult to come to the centre especially iftheir places of residence were located at adistance from the Sub-centre. People alsofound it difficult to attend to the Sub-centrebecause of the distance factor or itsinconvenient location. The buildings werelying unused for long and many of themcollapsed because of lack of care andmaintenance. There was almost nocommunity involvement in the entire processof infrastructure building.

Vehicles were also purchased duringthe project. But these vehicles were soonrendered useless due to lack of provisionfor their maintenance. Many hospitalequipment were also purchased for providingbetter service to the public. However, dueto lack of proper maintenance and timelyrepair, they were also rendereddysfunctional. The State government washedoff its hands by citing the strong reason of

3 The proposed pattern of expenditure was (in terms of percentages of the total proposed budget):(i) Construction : 43.1(ii) Staff Salaries : 29.2(iii) Drugs, Equipment & Furniture : 16.2(iv) Transportation : 6.6(v) Training and making of Teaching Aids : 4.9

4 In fact, the slow pace of construction activities during Phase I of the OHFWP is symptomatic of theconfrontationist interface between different state departments, in this case the Dept. of Health andFamily Welfare and the Orissa Public Works Dept. The 1994 Strategic Review Report makes a briefmention of “the difficulties to make the OPWD implement the plan for construction” (p-69).


lack of adequate resources for themaintenance of vehicles and equipment.

In many cases, drivers andtechnicians were recruited with investmentfrom the project resources. But it becamevery difficult for the State Government tosupport these additional staff beyond a point.Therefore, due to lack of personnel to handlethe vehicles and equipment, these becameredundant.

Training was also imparted to theparamedics, field health workers, TraditionalBirth Attendants (TBAs) and doctors in thisprogramme. One Information, Educationand Communication (IEC) Unit wasestablished at Bhubaneswar for facilitatingcapacity building. Training programmes wereorganized within the State, outside the Stateand outside the country as well. But all thesecapacity building exercises were not usedoptimally because the concerned personneldid not undertake enough outreach services.A large number of people also could not getthe information due to inadequate IECactivities regarding the improved capacity ofthe health personnel. Therefore, the benefitof all the training and capacity buildingexercises could not reach the majority of thepopulation in the targeted districts.

For building an effectiveManagement Information System (MIS),

efforts were also made. A lot of informationwas generated from the lowest level, i.e. theANM. The ANMs were asked to givedetailed information on the progress ofvarious health programmes. But due todifficulties in travelling to various places inthe Sub-centre area and due to lack ofprovision of adequate travelling allowanceto the ANMs, they usually cooked up datain the reports submitted to the upper levels.Even if the information was correct, the MISwas never made a two-way process forfacilitating better functioning of the system.

However, since infrastructure wasthe dominant feature of the project it wasprimarily favoured by the politicians becauseof the visibility of such infrastructure. Even if‘hardware’ was poorer in quality, thepoliticians could claim that they have ensuredprogress by building PHC or Sub-centrebuildings for the people of the area. But theproblem of the people remained unsolvedto a large extent5 .

According to some healthprofessionals who were associated with theproject, there was large-scale discontentmentamong the health sector professionalsregarding the whole issue of infrastructurebuilding because their opinion was nevertaken into consideration while the work wasbeing undertaken even though they wereultimately to use such infrastructure.

5 Strangely enough, the 1988 official evaluation (by the state government and the ODA Final ReviewTeam) of the Project was quite favourable and the conclusion made was that the Project had beengenerally successful in meeting its objectives. This was in conflict with the evaluation findings reachedby a number of independent consultants during the same time.


4.2 External Aid Flow to the HealthSector of Orissa During the ReformsPeriod

In spite of the obvious lacunae of aninfrastructure dominated ‘Area Project’scheme, it was a favourite among manyvested interests because of its visibility andthe scope it offered to ensure ‘leakage’ ofresources. Therefore, the second phase ofthe project was introduced in the State inanother 5 districts of the still uncovered 8districts (the State had a total number of 13districts). These districts were Dhenkanal,Sambalpur, Sundargarh, Mayurbhanj andKeonjhar. For better management of theproject a ‘Project Management Unit’(PMU) was created with one ‘EngineeringUnit’ and one ‘Finance Unit’ inside the PMU.This was done to ensure better degree ofefficiency and effectiveness.

4.2.1 Phase II of ODA Assistance (1989-96)

Though the predominance ofinfrastructure creation remained intact in thesecond phase of the OHFW Project, theinfrastructure creation process witnessedsome major changes that were meant for thebetter. One, the PWD was not given thecontract of building infrastructure. Instead,a more professionally managed agency, theInfrastructure Development Corporation ofOrissa (IDCO) was given the responsibility.Two, the monitoring of the infrastructurebuilding process was made rigorous because

of the presence of engineering people in thePMU itself to oversee the progress of thework. Three, this time around, local peoplewere involved in site selection andconstruction. This brought in a lot ofinnovation in the process of construction andensured community contribution in terms oflabour and resources. The famousenvironment friendly and cost effective ‘LauriBaker’6 style of infrastructure was built atmany places. All these factors combinedtogether contributed to the building ofcomparatively better quality infrastructure.

As far as training was concerned,this phase came up with some bold outcomes.It contributed to the strengthening of RuralHealth Centres at Atabira, Digapahandi andJagatsinghpur. These three centres were therural training and exposure centres meant forDoctors passing out from the Burla(Sambalpur), Berhampur and CuttackMedical Colleges, respectively. However,these centres did not have any interactiveprogrammes among the Medical Collegesnor the State Health and Family WelfareDepartment ever thought of utilizing theirinfrastructure for in-service training. Therewas also the problem of reporting. ThePrincipals of the respective Medical Collegeshad absolute control over them and it wasdifficult for the other health officials of theState government to pass orders to thesecentres for undertaking various trainingactivities. However, the IEC Centre set up

6 Lauri Baker is a famous architect of Kerala and his style of buildings are becoming very famous inmany areas of the country for its simple, environmentally suitable and low-cost approach.

during the earlier phase of the project wasupgraded to the State Institute for Healthand Family Welfare (SIHFW). Somesuitable administrative decisions were takenas a result of which, SIHFW became theapex training institution in the State and othertraining units were directed to schedulevarious training programmes in consultationwith the SIHFW. Besides, Health and FamilyWelfare training centres also came up atCuttack and Sambalpur during this period.Apart from this District Training Units(DTUs) also came up for facilitating trainingof the ANMs at the district level.

Various training programmes wereorganized for clinical, managerial and nursingstaff inside and outside the State as well asoutside the country. Thousands of staff weretrained for improved service delivery to thepeople. The training component wasextended to all over the State for bettercoverage.

One Health Equipment MaintenanceUnit at Bhubaneswar was established duringthis period for ensuring one-time repair ofall the equipment that were lying unused dueto lack of funds in the State government fortheir repair.

A Family Health Card maintenancesystem was also introduced in the projectdistricts to facilitate better monitoring ofcritical areas in mother and child health.

But after the end of the project cyclearound 1996, many serious loopholes wereidentified in the implementation of theprogrammes. Maintenance of infrastructurewas a big problem during this period alsobecause the State government did not haveenough funds. The State government wasalso not prepared to bear additional burdenof maintaining the SIHFW, although it wasimportant for training and re-training of healthpersonnel. MIS was again functioning asmostly a one-way process and was ANMcentred. At one point of time it wasdiscovered that one ANM had to maintain37 registers for generating required data.So, where was the time and energy left forher to undertake outreach services?7

The Family Health Card system wasdiscontinued because of problems ofmaintenance by the ANMs. The DistrictTraining Units specifically established fortraining the ANMs also became non-functional in due course of time.

7 The supply-driven (rather than user-driven) nature of health sector information systems has beencommented upon in a number of studies (ASCIH, 1989; Martinez et al, 1994). The reason attributed tothe increased burden of data collection on the primary level health staff is the ‘verticalisation’ of manyhealth programmes over the years and the creation of new divisions. The new proformas and otherdata collection devices have tended to add to, rather than replace, the existing ones.

4.2.2 Phase III of ODA Assistance (1997-2002)

The OHFWP has been in operationin Orissa since 1981. But it was realized afterthe end of the two phases of the programmethat the inputs of infrastructure and traininghave not ensured the expected increase inquality of services made available to thepeople8 . Some of the buildings producedby the project were already falling down dueto lack of maintenance, outreach servicessuffered due to lack of support for transportof personnel and drugs were often in shortsupply. Systems failure was widely seen tobe the underlying cause (for instance, failureof the system to allocate funds formaintenance, drugs and transport). Anumber of obstacles were identified for thedelivery of quality services9 . These obstaclesincluded: Lack of resources in three vital areas:

maintenance of buildings and equipment;supply of medicine and reimbursement ofmobility (travel) allowance.

Lack of local planning and management. Lack of quality training and uneven work

distribution.

Lack of ResourcesOnly 10-20% of expenditure at the

PHC and Sub-centre level was spent onnon-salary costs such as drugs, travel andrepair of buildings and equipment. This wasinadequate and created a number ofproblems. Centre’s infrastructure and

accommodation was poorly maintainedand dirty.

Equipment was either missing or wasdysfunctional because of poor repair.

Essential drugs were not available insufficient quantity.

Travel allowances were not always paidin full or in time.

Without proper accommodation andfacilities to carry out their work, the staffbecome demotivated and were less willingto stay in their place of posting. Dirty facilitiesin poor condition discouraged people fromusing them. Non-provisioning for travel costsled to discontinuance of outreachprogrammes and supervising tours. The1996 Impact Assessment Study estimatedthat, in order to deliver effective services,the state government would need to morethan double its budget for non-salary costs

8 The 1994 Strategic Review and the 1996 Impact Assessment study acknowledge that though Phase Iand II contributed substantially to the provisioning of buildings, equipment and training at the primaryhealth care level, their impact in terms of increased use or improved quality of health services has notbeen significantly felt.9 The 1996 Impact Assessment study indicates that the users of sub-centres, PHCs and CHCs perceivequality to consist, in part, of buildings in good repair and the availability of drugs and health workers,especially doctors. Further, ‘quality of health services’ includes other factors such as the inter-per-sonal relations between providers and patients, health workers’ clinical skills, clinic opening hours,and the availability of services that meet people’s priority needs.


at Sub-centres. Similar or even greater gapsare likely to exist at other levels of the primaryhealth system coming under the publicsector1 0.

Lack of Local Planning and ManagementThe 1994 Strategic Review Report

identified the lack of policy and planningcapacity in the state as a major constraint indeveloping a health service that is responsiveto local needs. Within the districts there waslittle opportunity for health staff to alterservices in response to the local needs.Indeed a lot of priority was given to targetdriven and centrally sponsored services, suchas family welfare and immunization and thismay not be locally appropriate. For example,if respiratory infections and malaria kill manychildren in a district, health workerspromoting sterilization and immunization willseem irrelevant. Therefore, the public willnot automatically value the services providedat the primary level and will go to thesecondary level. As a result the secondarysystems will be overcrowded and theprimary system will be under-utilized andopportunities are lost for health educationand preventive practices.

Lack of Quality Training

Doctors and health workerscomplained that the training they receivedwas not adequate for the tasks they wereexpected to do and there are few

opportunities for further in-service training.Many doctors having post-graduate trainingin a clinical specialization that was suitablefor secondary level services were workingin primary services without receiving trainingin public health or management. Practicalskills’ training for health workers was of lowquality both in clinical and communicationskills.

Systems Failure: The Underlying Causes

The underlying causes of theobstacles discussed above are often due tosystems failure. This means that themechanisms by which the governmentbrought personnel and resources togetherto get things done were inefficient. Forinstance, while discussing its attempts toobtain a comprehensive staffing profile of thehealth sector in the state, the 1994 StrategicReview Report records the lack ofinformation with the finance department ofthe state and comments that “… it issignificant that the agency responsible for theallocation of recurrent budgets to healthfacilities has no information on staffingpatterns on which to base such decisions”(p-18; emphasis added). Without reform ofinefficient and poorly funded systems, furtherinvestment in such things as new buildingswas unlikely to benefit the general people.An example of how systemic obstaclesaffected conditions in a clinic is given in thebox below.

10 The Project Memorandum of Phase III of the OHFW Project (1997) gives an estimate of the additionalnon-salary resources required for the whole state to the extent of Rs.390 million per year, equivalent to15% of the total health budget of the state or 0.7% of the total state expenditure of Rs.55 billion.


4.2.3 Involvement of other DonorAgencies with Orissa’s HealthSector in the Reforms Period

It would be pertinent here to mention thatthe ODA/DFID project is the only externallyaided project implemented in the State ofOrissa that has cut across the pre-91 andpost-91 periods, the dividing line beingintroduction of large-scale economic reformmeasures in the country in the year 1991. A

A PROBLEM WITH THE MAINTENANCE SYSTEM A leaking roof had damaged the wall of a PHC and short-circuited the electrical wiring. Indents were submitted requesting repair and after 3 weeks someone arrived to fix the wiring. The roof was still leaking, however, so electrical work cannot be done and the electrician returned to the HQ. Five days later the rural works department fixed the roof and plasters the wall. The electrician is recalled and he replaced the old wiring. Unfortunately, the new plaster is damaged by the work so another indent was sent to the rural works department to repair the plaster. The Medical Officer was told that there was no money left in the budget for further repairs and he should send another request next April. Shortly after the electrician finished his work, the Medical Officer entered his room to begin the clinic. He tried to switch on the light, but the bulb was fused. He was annoyed to find out that there was no more petty cash to buy a new one. So once more he held the clinic in the dim twilight of the unlit room.

number of external agencies came to thestate to invest in its health sector in the post-1995 period. These agencies have playedtheir own part in introducing and acceleratingthe reform process in the health sector ofthe state. They have been successful inpersuading the state government that initiatingreform measures would usher in more publicsatisfaction and better resource mobilization.The names of these agencies and the areas oftheir intervention are given below in Table-8.


AGENCY PROGRAMME/PROJECTWorld Bank Orissa Health Systems Development Project (OHSDP)

– development of district level hospitalsWorld Bank RCH Programme, Malaria Programme, HIV/AIDS

Programme and Blindness Control ProgrammeDFID Primary Health Sector Reform ProgrammeDANIDA Leprosy Programme, TB Programme

Lepra India (UK) Leprosy Programme

UNFPA IPD ProgrammeUNICEF Immunization Programme, Sanitation Programme

European Commission Sector Investment & Reform ProgrammeCARE India (USA) Specific Area Intervention in Nutrition & Health

Table-8: Externally Aided Health Sector Projects In Orissa at Present

5. Health Sector Reforms in Orissa andRole of External Assistance

The role of external assistance indetermining the pace and content of healthsector reforms in Orissa has been crucial.The DFID, in particular, has had a significantinfluence in shaping the reforms agenda ofthe state, obviously owing to its long presenceand the magnitude of its commitments in theregion’s health sector. In fact, as will bediscussed below, Stage 1 of Phase III of theOHFW Project was designed to dovetailinto a comprehensive reforms programme atthe state level.

5.1 DFID-Sponsored Initiatives in Orissa’sHealth Sector: Phase III of ODAAssistance (1997-2002) and the threeMs

In Phase III of the OHFW Project, theODA (by now it had become DFID) decided

not to fund any more the construction ofbuildings without bringing about somesystemic changes in the health sector of thestate1 1. Therefore, it was communicated bythe DFID to the Government of Orissa thatit would provide resources for introducingreforms in three areas of concern:Medicines, Maintenance and Mobility(known as 3 M’s). Phase 3 of the OHFWPwas to have two stages: stage 1 and stage2. In stage 1, the 3 systems to be givenemphasis were:

· System of supply of medicines.· System for supply of travelling allowance

for ensuring mobility.· System for maintenance of buildings

and equipment.

The DFID decided not to supportreform in these systems in the remaining 3uncovered districts of Bolangir, Balasore and

11 This policy shift on the part of the DFID may be linked to a series of evaluative studies on thefunctioning of OHFWP and investigations on the constraints hindering the development of Orissa’shealth sector. The two most influential investigations have been the Strategic Review Report of thehealth sector carried out in 1994 by the Liverpool Associates in Tropical Health, and the ImpactAssessment Study carried out in 1996 by the Institute for Health Service Development.


Koraput of the earlier ODA projects.However, by this time the districts had beenreorganized in Orissa in 1993 and theprevious 13 districts had become 30districts. Because of the reorganization, theuncovered 3 districts of the ODA’s project(OHFWP) became 8. The DFID decidedto experiment the reform process of 3 M’sin two selected districts of Bhadrak (newlycreated) and Keonjhar.

In addition to the main three activitiesof reform, the project also aimed atconsidering as to how to improve communityparticipation and suggest how services mightbe made more responsive to local needs byaltering the service mix. Attempts were alsoto be made by the health sector staff to workmore closely with other social sectororganizations and institutions such as thePanchayati Raj Institutions (PRIs).

At the State level it was also thoughtto undertake some intense research to findthe best ways to successful initiatives withinthe two experimental districts, i.e. Bhadrakand Keonjhar. It was envisaged that, usingthe results of the DFID-sponsored initiativesin these two districts and policy research,the State would draw up a programme ofpolicy reform to be incorporated into theproject plan for stage 2 (for the remainingold 3 districts which had then reorganizedinto 8 districts). During stage 1, managementand training skills were to be strengthenedwith the initiatives to be undertaken by theSIHFW.

It was made very clear by the DFID thatstage 1 would be counted a success only ifthe following two conditions were met:

· There was demonstrable improvementin quality and utilization of health servicesas a result of increased funding and localmanagement.

· The State has put in place feasibleprogrammes of policy reform, which islikely to succeed in introducing changesto all districts in sustainable manner.

With these future programmes in mind,the experimentation in 3 M’s (medicine,mobility and maintenance) in the twoexperimental districts of Bhadrak andKeonjhar started. But soon after, theexperimental steps taken in the two districtsushered in reforms in the entire state.

5.1.1 Changes in Medicine ProcurementThe objective of this initiative was

to make sufficient and good quality drugsavailable to patients in all public healthinstitutions. Prior to the DFID-sponsoredexperiment under Phase III of the OHFWProject, the procedure relating to purchaseof drugs for the State health institutionsinvolved a mechanism for finalizing the list ofdrugs, prices and suppliers at the Statelevel, allotting funds to the districts andthereafter allowing the CDMOs to managethe procurement and distribution. The systemwas time taking and cumbersome, themedicines were costly, there was no essentialdrug list, medicines were ordered by brand


name, there was no quality test and therewere many irregularities in purchases. Someirregularities observed by one of the medicalprofessionals associated with the DFID arepresented in the box below.

In order to do away with theirregularities and ensure more and qualitysupply of drugs, a new centralizedprocurement system largely borrowedfrom Tamil Nadu was introduced and itbrought in several welcome changes.

An essential drug list was drawn uplisting drugs in generic names. This wasfurther classified into three categories for theprimary, secondary and tertiary levelinstitutions. Thereafter, orders for the drugswere placed and while payments were madecentrally, the supplies were delivered at the

IRREGULARITIES IN THE MEDICINE PROCUREMENT SYSTEM The CDMOs of the districts were allocated funds to purchase medicines. They were supplied with an approved list of medicine suppliers and they could choose any of them for supply of specific medicines. The CDMOs used to purchase medicines not as per the needs of individual PHCs in their districts. More often than not, this led to a mismatch between the demand for and supply of medicines. For example, the medicine for a particular disease was supplied to a PHC that had no need for the same. The medicine supplied will not be used and this will be a dead-weight wastage. Moreover, this will result in corruption in the sense that the unrequired medicine will be sold in the market and the money will be pocketed by the hospital staff. The CDMOs usually entered into unholy alliances with the medicine suppliers. They will ask the medicine suppliers to quote higher prices and give false bills for medicines not purchased at all. This benefited the CDMOs, local politicians and the medicine suppliers. But this resulted in lesser supply of drugs to the people.

district level with the cost of supply incurredby the suppliers. Before the orders werefinally placed, a secret quality check fromwell-known laboratories of the country wasmade at the expense of the suppliers. Each

institution was informed of its entitlement ofdrugs (by value) and was given a passbook.It can make its own selection, constrainedonly by the essential drug list and the overallentitlement. Quality was insisted upon withproper packing, logos and quality testing.For emergency purchases, only 20% of thedrug budget was paid to the CDMOs.

5.1.2 Improvements in MobilityEarlier the health personnel did not

have adequate petty cash at their disposalto meet the necessary travel expenses tocarry out outreach activities. In the two


DFID-sponsored project districts, sufficientprovisions were made to meet this need.Further, to ensure better mobility, emphasiswas laid on efficiency savings andrationalization of vehicle use.

Vehicles were available with manyblock level PHCs or CHCs. The MedicalOfficers of the concerned PHCs/CHCs wereasked to declare their tour plan in the areamuch in advance so that other personnel inneed of travelling to those specified placescould travel by the same vehicle. This notonly resulted in rationalization of vehicle usebut also saved money and time.

In some other cases, vehicles wereused when special camps were organized atremote areas. The vehicles that carriedequipment and personnel to the camp sitestood unutilised at the site for many hours.In such cases it was decided that otherpersonnel would plan their schedule in sucha way so that the vehicles could be used foroutreach programmes in and around thecampsite during the time they were lying idle.This is another small but significant instanceof optimising use of available vehicles forensuring better ‘mobility’.

The provisioning for travel expensesin the two project districts led to a feeling ofinequality among the staff of other non-project districts. Therefore, the Stategovernment decided to do something at theState level to meet this problem. However,the State government did not have adequate

funds to meet the travel needs of all the healthpersonnel. Therefore, a policy decision wasmade to provide travelling allowance/mobility support to the most importantstaff in the entire set up, i.e. the ANM. Itis the ANM who always remains in touchwith the people and works at the grassrootslevel. Therefore, the ANM’s requirementwas considered paramount.

5.1.3 Improvements in the MaintenanceSystem

All building maintenance work,including petty and annual maintenance, aswell as special repairs had been theresponsibility of three governmentengineering departments, the WorksDepartment (for urban areas), the UrbanDevelopment Department (for urban watersupply and sanitation) and the RuralDevelopment Department (for rural areas).Since these departments have personnel onlyat the district or at best block headquarterslevel, and since health department buildingswere scattered far and wide, most of theinstitutions did not get attended to at the timedire requirement. Petty repairs, which maycost a few hundred and few thousand rupees,were almost never taken up in time. Thematter therefore needed to be addressed.

Under the DFID-sponsoredinitiative, the project districts were given thenecessary assistance. But, very soon,realizing the importance of the matter, theState government decided to identifyhundred block CHCs / PHCs and the in-


charge Medical Officers were given Rs.10,000 each annually to take up pettyrepairs. They were asked to undertakeurgent minor repair works following simpleprocedures. The impact of this programmewas immensely beneficial for the concernedCHCs/PHCs. This initiative is beingextended to the whole state shortly,remarked some top government officials.

5.2 Health Sector Reform InitiativesUndertaken in Orissa by the Government

Interest in health sector reform at thegovernment level began to gather strength inOrissa in the mid-1990s. Two eventsheralded the beginning of this process.First, the formation of a Committee ofthe Orissa Legislature chaired by theHealth Minister (called the HouseCommittee) which looked into threeimportant aspects of health care, andadvised on (i) raising additional resourcesfor health care activities by introduction andretention of user charges in the medicalcolleges and district hospitals; (ii) grantinggreater autonomy to the major hospitals; and(iii) the abolition of private practice bygovernment doctors. The second event

was the evaluation done by the DFID(earlier ODA) of its two health andfamily welfare projects in Orissa whichconcluded that further capitalinvestment in the health sector of thestate would be inadvisable unless certainsystemic changes were undertaken.

In the 5 years or so following thesetwo events, a number of reforms, both largeand small have been introduced in the healthsector in Orissa. Some of them relate tochanges in administrative and operationalsystems, some to changes in personnelpolicies including skill development for betterservice delivery and some are aimed at givinga minimum health guarantee to the people.The reforms have had varying degrees ofsuccess. The DFID-sponsored reforminitiatives relating to drug procurement,mobility of medical personnel andmaintenance of buildings in the projectdistricts and the subsequent adoption ofthese steps by the state government havebeen already discussed. The salient featuresof some of the other principal reformmeasures are described briefly below intabular form.


3

Mandatory Pre-

PG Rural

Service

1999

To ensure the presence of

doctors in remote and difficult

areas and also to provide

better rural orientation to

young doctors.

To the whole State.

For the doctors, this scheme has its plus points in that

the assignment is for a limited period only and is linked

to something that is highly desired (a PG degree). Since

the scheme involves young doctors who have freshly

qualified, greater acceptance of the rural assignments

among them is obviously expected. Senior doctors are

supposed to be spared from such assignments.

However, as per newspaper reports, there appears to

have been no improvement in the ground situation in

remote and difficult areas as far as the presence of

doctor is concerned.

4

Pancha Byadhi

Chikitsa (5

Diseases’

Treatment

Scheme)

1999

To ensure that every patient

who goes to a public hospital

is guaranteed treatment at

government cost for 5 major

diseases (malaria, leprosy,

diarrhoea, acute respiratory

disorders, and scabies). It is

estimated that 70% of the

patients who attended public

health institutions came for

treatment of one or the other

of these diseases. Two more

diseases, TB and

Helminthiasis (parasitic

infestation) are soon to be

added to this list.

The whole State – a pilot project

The scheme has created a health entitlement and risk

protection guarantee for the poor, because it has been

kept out of the user fee collection system.

Introduced Objective Applicability Expected and Realized Impact

1 User Charges 1997To raise resources for the

health institutions from people

All tertiary, district and block level

government hospitals in the State

By making funds available at the hospital level for day-

to-day working capital and emergency needs, the

Sl.no.Nature of

Reforms in the

2Privatization of

Cleaning in 1998

To ensure cleanliness in public

hospitals.

Undertaken as a pilot project in a

few district level and tertiary

An indication of the felt need for, and popularity of

cleanliness. Some district hospitals have contracted out


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5.2.1 Analysis of the Impact of TwoSelected Reform Measures

Although the state government in thepast decade has undertaken many reforminitiatives, this paper tries to evaluate theeffects of two selected reform initiativesrelated to (a) user charges and (b) drugmanagement system.

a. User Fee CollectionEven before 1997, the user fee

collection from patients was in existence ingovernment hospitals of Orissa but it wasrestricted to certain items such asaccommodation in air-conditioned cabins,use of ambulance, x-ray and few othermedical investigations. The HouseCommittee constituted by the OrissaLegislative Assembly to review the healthcare system recommended collection of‘user charges’ in all district headquartershospitals, all three medical colleges of thestate and a few other hospitals. This wasdone with effect from 01/07/1997 (vide agovernment order dated 24/06/1997) “inorder to generate additional resources tosupplement the budgetary allocation with aview to improve and extend the medicalfacilities”. The government order revised theexisting rates and covered new areas for levyof fees/charges in respect ofaccommodation, transportation, radio-diagnosis, and medical investigation.However, the order exempted patientsfrom poor families living below povertyline from any such fees/charges, with thecondition that there must be a

recommendation of the treatingphysician and the CDMO/Superintendent of the concernedhospital. To make the system easier for thepoor people, the order made it clear thatthe authorities should not insist on productionof records and documents as a matter ofproof that the user household resides belowthe poverty line. At the same time, thenumber of exemption cases should notexceed 40% of the total patients from whomcharges are collected.

The government order provided forthe formation of a society at the level of eachhospital so that the funds collected could beutilized for the “maintenance andimprovement of the respective hospitals andfor ensuring qualitative health care facilitieswithout being deposited in the concernedtreasuries”.

A 1999 study on ‘user charges inOrissa’ reports that that the user chargecollection system introduced in thegovernment hospitals in Orissa hassubstantially benefited both the hospitals andthe patients. The hospital authorities wereable to mobilise resources at their disposalfor otherwise neglected activities of thehospitals thereby improving the healthservice delivery system. Many hospitalauthorities were able to feel a sense ofbelongingness to the institution and motivatedto take up initiatives for improving the serviceperformance. The patients in generalaccepted the system. Those who had to pay


user fees were of the opinion that it isaffordable and associated it withimprovements in the quality of health careservices.

However, the study does reportisolated incidents of non-cooperation andsabotage by health personnel andprofessionals. There were also problems likecollecting fees from poor patients, overcharging and non-payment of balance,delayed bank remittance, utilization ofcollection without depositing in the bank, notgiving proper receipt, delaying results etc.These are problems specific to the individualsand can be controlled. A more damagingrevelation by the study relates to the tendencyon the part of some Medical Officers toprescribe and direct patients to use thediagnostic services located outside evenwhen such facilities are available in thehospital. The reason usually cited is that theprivately maintained facilities are better interms of quality and reliability. However, howthis quality of private facilities could beguaranteed by the Medical Officers, whenthey themselves were given the opportunityto improve the quality of the servicesprovided by them (using the user fees), is anexus not fully explored.

According to available figures, thefee collection from 1/7/97 to 31/3/99 wasRs. 2.98 Crores, which amounted to roughly1% of the then total government expenditureon health in the state. Out of this amount, amajor portion (Rs. 1.13 Crores) was

collected from the SCB Medical College,Cuttack. Though these figures reveal thepotential of user fee collection as one of themajor areas for resource mobilization, someserious information gaps exist with regardsto who is paying for what, the economicimpact of the charges on the users, and theextent to which such charges have affectedquality and accessibility of public health careservices/facilities.

b. Drug Inventory Management System(DIMS)

A change in the pharmaceuticalpolicy was effected by the Orissa Health &Family Welfare Department from early1998. The changes were intended torestructure drug procurement anddistribution system. The underlining principleof the reform measure was to make availableand accessible the maximum possible typesof quality drugs, optimizing the existingfinancial resources, rational drugmanagement and improved prescribingpractices.

The major features of this policycomprised: A rational drug list containing essential

items of drugs in generic names only. Freedom of institutions to choose any

drug in any quantity, constrained only bya given budget and essential drug list.

Centralized drug procurement frommanufacturers only, to ensure bestcompetitive prices.


Twenty percent of the drug budget madeavailable to the district and peripheralinstitutions for emergency purchase andmeeting expenditure towards transport.

Online inventory control system thatconnects 33 warehouses and one centraldrug store attached to the main office tothe central office.

The benefits of the new system weremany. The essential drug list in generic namescut down the purchase of many unnecessary

drugs and resulted in rational drugprescription. Bulk purchase, central paymentand adherence to a strict schedule of paymentresulted in economies of scale and greatervalue for money (for example, IV fluidsearlier supplied at the district level at Rs. 16per bottle came down to Rs. 6). This mayhave contributed to the decrease in theannual drug budget of the State in recentyears (Table-9). Strip packing increased theacceptability of drugs by the public. Qualitytesting and blacklisting of sub-standard drugsuppliers resulted in good quality drugs being

supplied. The institutions had the freedomto select their own drugs and, most importantof all, drugs were available in plenty in allinstitutions. Because of introduction of acentralized drug procurement and supplymechanism, a computerized on-line inventorycontrol system could be put in place. Thisresulted in improved monitoring of drugavailability at the district level at any point oftime and better transparency andaccountability.

It is likely that because ofcompetition and maintenance oftransparency in the drug procurementsystem, drug prices have remained more orless unchanged over the years. A comparisonof the cost of various drugs and the stockposition of drugs at various hospitals beforeand after the DIMS was introduced givesthe following figures. The comparison by andlarge shows that the newly introduced systemhas produced positive results as far as costsand stock positions of various drugs are

concerned.

Year

Non-Plan State Plan

1997 - 98 787.17 333.11 1120.28

1998 – 99 813.64 617.53 1431.17

1999 – 2000 813.79 287.55 1101.34

2000 – 2001 761.3 109.09 870.39

2001 – 2002

(Provisional)

2002 – 2003

(Provisional)

Table – 9: Budget of Allopathic Medicine in Orissa (Rs. in Lakhs)

760.75 408.8 1169.55

Total

Sector

760.25 297.42 1057.67


Figure 4: Comparision of Cost Before & After DIMS

13.

60

5.5

3

1.9

9

49.4

7

7.3

1

5.0

4

1.3

4

37.7

3

-

10.00

20.00

30.00

40.00

50.00

60.00

Normal

Saline

I.V. Set Disp. Syringe

(5ml)

Absorbent

Cotton

Item

Cos

t in

Ru

pee

s

Before DIMS

(95-96)

After DIMS

(01-02)

0 60 0100

1240

210340 355

0200

400600

8001000

12001400

Jajpur Kandhamal Koraput Nayagarh

Districts

Sto

ck i

n V

ials

95 - 96

01 - 02

Figure 5: Comparision of Stock Position Before & After DIMS

Inj. Anti Snake Venum


3110

540

2640

7530

4550

4500

3880

7214

0

1000

2000

3000

4000

5000

6000

7000

8000

Jajpur Kandhamal Koraput Puri

Districts

Sto

ck i

n U

nit

s

95 - 96

01 - 02


Tab. Metronidazole (400mg)


I.V. FLUIDS

1130

0

1031

0

2334

5

6296

23265

8258

24040

36464

0

5000

10000

15000

20000

25000

30000

35000

40000

Jajpur Koraput Balasore Nayagarh

Districts

Sto

ck i

n B

ottl

es

96 - 97

01 - 02



Disposable Syringe (5cc)

0 0

2000

3600

0

1000

2000

3000

4000

Jajpur Puri

Districts

Sto

ck i

n N

um

ber

s

95 - 96

01 - 02

6. Other Impacts of External Assistanceon Health Sector of Orissa

Apart from the reform measuresmentioned above, some other effects ofexternal assistance to the health sector ofOrissa is also witnessed. These aresummarized below.

6.1 Community Participation

In the OHFWP (Phase – III)Project, the project memorandum clearlyindicates the options for: (i) increasing theinvolvement of communities in health servicesmanagement and delivery; (ii) ensuring equityfor disadvantaged groups in consultation withthose groups; and (iii) consulting with serviceusers, their representatives and otherstakeholders for greater communityinvolvement. There is no mention of seeking

or prompting initial investments by thecommunities for provision/delivery of healthservices.

But in the “Norm-based guidelinesfor the preparation of district plan ofoperation”, or in the document “An outlineof procedure for undertaking activitiescontained in the district plan of operation”,nothing has been mentioned as to how theobjectives for community involvement willbe achieved.

Expectedly, no attempt has beenmade in any of the above directions and thereis no evidence to suggest that a participatoryapproach has ever been adopted either toaddress the problems specific to thedisadvantaged groups (women, children,scheduled castes, scheduled tribes, etc.) orto take their opinion for making suitablechanges in the service delivery mechanism.


As far as accepting communitycontribution as a norm for future healthservice activities, nothing has been initiatedand the issue remains as sensitive and touchyas ever and the politicians are afraid ofmaking any move in this direction.

6.2 Preventive, Curative & PromotiveAspects of Health Care

There are three aspects of the healthservice delivery scenario: preventive,curative and the promotive. There are threetiers in the health system: primary, secondaryand tertiary. The primary health care(consisting of PHCs, CHCs and Sub-centres) tier is more preventive andpromotive in nature in Orissa than curative.It is largely oriented towards MCH and inparticular to meet physical targets. Although,the strongly felt need of the people is forcurative care, it is not met to a satisfactoryextent at the primary level. The ODA projectin its initial two phases played a vital role increating infrastructure and provided physicalaccessibility to the unreached. Physicalaccessibility was assumed to be the mostimportant factor determining provisionof health services. But it is now beingincreasingly recognized that simply providinga facility is not enough and that demandgeneration is also required, particularly forpromotive and preventive services as thoseprovided by the government.

The first curative facility in thegovernment structure is the single-doctorPHC covering a population of 25–30,000population. It is common knowledge that

most of these doctors do not reside near thePHCs and rather they prefer to stay in nearbytowns. They commute to the PHC and arenot able to give the full time of the day toattend to the patients who come for gettingcurative care. They also remain absent inspite of several measures taken by thegovernment in the recent years. At the sub-centre level, very little is provided by theANMs in the way of curative services.ANMs have a very limited selection of drugsavailable and are rarely present at the sub-centre since they are supposed to spendmost days in visiting nearby villages.

Since the people are not very surethat they will receive the desired curativetreatment at the PHC level, they prefer totravel to the CHC in the nearby town or todistrict hospitals, i.e. the secondary tier.Realizing that people are more dependentupon these hospitals for curative purposes,the Government of Orissa has started anambitious Secondary Health SystemDevelopment Project in the State with thehelp of World Bank. This is also aimed atlessening the excessive pressure on thetertiary level hospitals, i.e. Medical CollegeHospitals. It is needless to mention here thatthe tertiary tier mostly provides curativeservices and also creates trained manpowerfor providing these services.

In the recent years, the World Bankhas provided financial support to theGovernment of India to launch manyNational Programmes, which has reinforcedthe importance of the preventive mechanism


in health services. For meeting the needs ofthe National Programmes, the vast physicalnetwork of PHCs and Sub-centres havebeen helpful to a great extent.

Whilst the main causes of healthproblems in India indicate a clear need for amajor investment in health education andhealth promotion, not enough was done inthe past to boost the promotive aspect.

However, in the recent years IEC activitieshave been given importance by thegovernment as well as by the NonGovernment Organizations being supportedby the National and International Agenciessuch as the UNICEF, Plan International,Family Planning Association of India,National AIDS Control Organization,Parivaar Seva Sanstha, Voluntary HealthAssociation of India, CARE, etc. One cannow-a-days see the practical outcome ofsuch efforts in the form of billboards, posters,awareness campaigns, and advertisements

in newspapers, radio programmes and thetelevision. Over the recent years the role ofpromotive campaigns has increased.Moreover, the independently run NationalProgrammes on TB, Malaria, Leprosy, HIV/AIDS, etc. have greatly contributed to thepromotive aspect.

Therefore, there is no evidence ingeneral to suggest that any of the three

aspects of health services – preventive,promotive and curative – has got specialattention or received more importance inrelation to the other aspects.

One project, i.e. the ODAsupported OHFWP programme ran both inthe period before the economic reformsprogramme in India started and also after it.If one looks at the available projectdocuments to know which of the activitiesdominated the project cost estimates, then

the following picture emerges.

Percentage Share of Activties in Phase-I Project Cost

Others

12%

Salary

16%Training & IEC

4%

Drugs &

Equipment

11%

Construction

57%

Note: Phase-I of the ODA Project was implemented in the pre-reform period.


Percentage Share of Activities in Phase-II Project Cost

Drugs &

Equipment

3%

Others

7%Training &

IEC

14%

Construction

76%

Note: Phase-II of the ODA Project was implemented in the pre-reformperiod as well as after the reforms started.

The above two pictures give an ideathat the preventive aspect, i.e. through theconstruction of new PHC, CHC and Sub-centre buildings has got a boost in theconcerned project in the Phase-II than inthe Phase-I. The curative aspect, i.e. drugsand equipment has nose-dived in Phase-II,while the promotion aspect, i.e. training andIEC activities has got more importance inPhase-II, in comparison to Phase-I.

6.3 External Funding in Health Sector &Project Performance in Terms of Input& Output Indicators

Actually, in the past and also atpresent, there is no health sector programmein Orissa, which is directly funded or initiatedby the State Government. The Government

of Orissa always implemented theprogrammes initiated by the Union HealthMinistry and followed the National HealthPolicy guidelines. Until recently(September 2000) it did not have aHealth Policy of its own, although it isstill in a draft stage and is awaiting theapproval of the State legislature.

The first two phases of the ODAproject did not have any reference to theinput and output indicators of the projects.But the Phase-III of the project reflects awell-defined input and output indicators’ listin the form of a logical framework. Some ofthem are reflected in the table below.


Sl.

No.

Input Indicators Output Indicators How Far Realized

1 Govt. of Oris sa (GoO)

continues to support sector-

reform programme politically

and financially.

Government orders or

legis lation is sued for

continued implementation of

sector reform by A ugus t 2000.

The Draft Health Policy

document was ready by

September 2002. But it s till

awaits approval by

legis lature.

2 District managers have

neces sary levels of delegated

authority for personnel,

decis ion-making and budgets

and expenditure.

Health W orker absenteeism

reduced to agreed target level.

IEC activities and products

meet health s ector needs.

No available data to sugges t

that health worker

absenteeism has reduced.

3 GoO generates support for

and contains oppos ition to

reform, e.g. from health

workers , profes s ional

organizations , unions and

politicians .

Significant increase in user

satis faction. Phys ical

environment meets defined

standards of cleanlines s and

repair.

No satis factory advancement

has been made in all the tiers

of health delivery sys tem in

the State.

4 Users have influence in

priority setting and in the

accountability of local health

service providers .

SC/ST and women are

significantly higher in

proportion of people s erved.

Increase in user numbers . But

no certainty regarding the

proportion of SC/ST &

women.

5 No significant delay in

pas sing orders or legis lation

for health sector reform.

Directorates of Health &

Family W elfare contribute to

policy analyses .

Delay in pas sing orders is the

norm in Government s ector.

6 Current working practices will

not constrain officials ’ ability

to introduce change.

Improvements in indicators of

quality, equity and priority

setting as a result of

maintenance sys tems and

health worker availability.

M anagement manpower is not

in response to the needs of

the people. No marked

improvement in maintenance

sys tems .

Table – 9: Input And Output Indicators Of Phase-III ODA (DFID) Project

The Secondary Health SystemDevelopment Project supported by theWorld Bank and being implemented atpresent in the State has also very clearlymentioned input and output indicators in theproject document. Now it becomes quiteevident that the projects that are initiated oflate by external agencies always insist on aclear mention of input and output indicatorsand working on those lines.

As far as centrally sponsoredprogrammes, there is no evidence to suggestthat the input and output indicators are takenas the guiding lights for projectimplementation. But the World Bank andother agencies now-a-days finance most ofthe nationally implemented programmes. Oneonly hopes that due to insistence of externaldonors such indicators are accepted asguidelines for implementation of suchprojects.


6.4 Effects on Health FinancingOver the years the percentage of

health budget in relation to the total budgetof the State has declined. Although,ascertaining the reasons of this decline needsa deeper analysis, one of the reasons couldbe the flow of external assistance to theState. If this is indeed one of the reasonsthen the State authorities must formulate longterm plans from now to keep the budgetincreasing even after the external assistancein various activities are withdrawn in future.A glance at the following table will make thepicture of the declining health budget clear.

As in the case in many other statesof India, a major problem in the healthbudget of the state is the growing mis-matchbetween salary-related expenditures andexpenditures on commodities. The healthsector salary-related expenditures increasedfrom 71% of total expenditure in 1974-78to 81% in 1985-88. Over the same periods,

Year Health Budget as %age of state

Budget1990-91 3.611991-92 2.92

1992-93 2.981993-94 2.96

1994-95 2.741995-96 2.86

1996-97 31997-98 2.67

1999-2000 32000-2001 2.98

2001-2002 3.05

Table – 10: Health Budget as a Percentage of State

Budget

the expenditure on commodities fell from27% to around 14%. When translated in

terms of the ratio of salary-relatedexpenditures to commodity-relatedexpenditures, the lopsided growth of thebudget is strikingly evident – from 2.6:1 in1974-78 to 5.6:1 in 1985-88. This trend inthe health sector expenditure patterncontinues in the present period also. Veryserious thought on finding sustainable sourcesof finance for health services delivery mustbe made in order to avoid difficult situationsin future.

7. Tracking the Flow of Funds at theDistrict, Block and PHC Levels

One of the researchers went on afield trip to the Keonjhar District of Orissa,i.e. one of the districts where health reformsstarted for the first time in Orissa with thefinancial assistance of DFID. The researcherinterviewed the Chief District MedicalOfficer (CDMO) regarding the subjects


whether they are able to know what fundcomes from which source and whether theymaintain separate accounts for each separatesource of funds differentiated by the purposeof such funds. The facts that emerged fromthe interview are the following:a. At least little more than a decade back,

the funds which came from the StateGovernment for different purposes like,building PHCs, Sub-centres, residentialquarters for Medical Officers and healthpersonnel, malaria eradicationprogramme, leprosy eradicationprogramme, etc. were not being keptseparately for each purpose. This usedto create difficulties for the districtadministration to spend the moneyrationally and for the purpose it wasallocated. When everything was kepttogether, certain issues used to suffer.This also used to lead to unnecessaryexpenditure on not-so-important heads.For example, certain amount has beenprovided for new construction, repairand maintenance. If the amounts are notkept separately, this would invariablylead to over expenditure on constructionand as a result, crucial needs for pettymaintenance and repair would suffer.

b. Further, for example, the allocation forleprosy programme was overspentbecause the funds for many programmeswere kept together. This would meanless expenditure for malaria programmeor TB programme. When funds areearmarked for separate programmes in

separate accounts, the usual tendency isto rationalize and economize expenditureand to manage within the given limits. Butwhen funds for various purposes arekept together, usually one purpose isserved at the cost of another.

c. However, for the last 6/7 years, with theformation of Zilla Swasthya Samiti (ZSS)– district health committee – the fundsfor various purposes are being keptseparately. The donors also make it apoint to ensure that the purpose forwhich their fund is given is not dilutedand the entire allotment is exclusivelyspent on the specific programme.

d. At least in case of the DFID fundedreform package in the Orissa Health &Family Welfare (Phase-III) Programme- OHFWP - the funding agency alwaysinsisted for separate accounts at theBlock level, i.e. Community HealthCentre. But this did not pave the wayfor maintenance of separate accounts forother programmes/activities.

e. At the PHC level, one can see the traceof the investments made by the ODA,during the OHFWP Phase – I and Phase– II for construction of PHC buildings,expansion of the existing structure orconstruction of new ones for providingadditional beds, construction ofresidential quarters, etc. even if in mostcases the buildings have deteriorated dueto low quality of material used during theconstruction process.


8. Concluding Remarks and PolicyImplications

Health sector reforms in Orissarepresents a classic case of externalassistance propelled initiative, with DFIDplaying the role of a catalyst. Although theresearchers have not yet found anydocument establishing concretely as towhy DFID (the erstwhile ODA) choseOrissa as its destination, it can be safelyguessed that the relative backwardnessof Orissa’s economy and the large scaleunderdeveloped nature of Orissa’shealth service delivery mechanism musthave prompted the external donoragency to invest in creating healthinfrastructure in the state more than twodecades back. Accessibility of people ingeneral to some kind of a system at areachable distance where a doctor and otherparamedics are available was seen as a keydeterminant for delivering health services.

It became a different storyaltogether when the Orissa governmentapproached the DFID (new avatar ofODA) to give funds for Phase III of thepredominantly infrastructure-orientedproject to cover the remaining 3 districts ofOrissa (uncovered by earlier ODAprojects). Infrastructure creation was thebest option for the political bosses to showtangible results to their constituency. TheDFID on its own made certainconditions to be realized before it madeany commitments for the developmentof the health sector in the state. This

opened the gates for reform initiatives.The Government of Orissa (GoO) also wentbeyond the 3M’s and initiated many othermeasures for ensuring a better health deliverymechanism in the state.

But when we measure the successof such initiatives, there seems to be littlereason for celebration. The number ofexternally assisted projects in Orissa hasincreased. It has certainly created abetter impact in terms of removing theimmediate worry of the GoO to searchfor sources of funds to address the healthof the people of the state. But thisopportunity has not been utilized to findout alternative and sustainable sourcesof finance for financing the healthsector needs in future.

It has certainly created morebuildings, equipment, beds, medical andparamedical staff, vehicles, volume of drugs,etc. But putting these hardware to good useand thereby meeting peoples’ needs in thispoor state has remained far from satisfactory.Here a clear distinction between ‘process’and ‘performance’ indicators has becomeglaring vis-à-vis reform outcomes. Theprocess outputs have been encouraging.But there seems to be no trace of aperceptible increase in the performanceof the health sector.

The ‘hardware’ in any givensituation will show good results only when itis put to rigorous use. But the persons


responsible to put them into good use mustbe adaptable to the changed scenario andthe new demands. There is in fact a lack ofinternalization of the reform measures by thehealth sector personnel themselves. A retiredhealth sector professional remarked veryaptly during an interview that ‘although thewherewithal to ensure better healthservice delivery has been by and largeput in place through external support,the persons suitable to implement thesame cannot unfortunately be suppliedby the external agencies. They have tobe our local people or those who arealready inside the system. Unless theyinternalize the prerequisites of a broadbased reformed structure, how can weexpect better results from them in thefield?’

Realizing this need, a sectoralinvestment programme (by EC) speciallydesigned for reforming people who aremanning the state’s health sector has alreadybegun. A case in point is the initiative of theOrissa government to send young doctorspursuing their P.G. courses in the 3 MedicalColleges of the state to remote areas forserving the people in the remote/rural areas.This was mooted as a solution to theperpetual problem of large-scale absence ofdoctors in those areas. Doctors who have afamily or children never wanted to be postedin rural areas because of the fear of theirfamily being left out of the modern facilitiesthat are available in the towns or their childrenlagging behind others for want of good

educational institutions in a rural set up. Toovercome this problem it was thought that ifyoung people were posted in rural areas thena long-term solution could be effected to thiscomplex problem. Even to encourage suchpeople and also to have a safeguard, it wasdecided to award some marks to suchpeople in their P.G. Degree examination inlieu of their service in the rural areas. Butthis also has not resulted in any good result.Numerous newspaper reports suggest thatthis system has not worked and the peopleat the helm of affairs in the Directorate ofHealth Services also admit that this systemhas been a great failure and the doctorsposted in rural areas find out their ways toremain absent for a large part of the month.

In order to effectively check thislarge scale absence of doctors in ruralareas the State Health Departmentdecided in January 2003 that the doctorscannot go on leave unless they takepermission from the concernedPanchayat Samiti. This decision wasreported to have been taken after muchinsistence of the external donors like theDFID. But as soon as this news was out,the doctors started giving warnings to thestate government for ‘mass leave’ or ‘massresignation’ if they were asked to report tosuch people as the Chairperson of theconcerned Panchayat Samiti. It shows veryfirm reluctance on the part of healthprofessionals when community control overhealth issues is put in the agenda. This raisesa larger question in the health service delivery


system. What is the way to ensurecommunity participation when communitybased institutions like the Panchayats areprevented from having a say in the healthissues? The most crucial factor inensuring proper health service insidethe government system to the poor whocannot afford ‘private health servicesystems’ is the doctor’s ready availabilityat the health centre for consultation. Ifthe doctor is missing or is unwilling tocooperate with the community evolvedmechanism, then what is the way out?Is there any other mechanism that canwork satisfactorily to ensure the doctor’spresence in rural areas? This remains oneof the points in the unfinished agenda of thereform process.

There are reports regardingsatisfaction of people with the ‘user charges’collection system. Some places like‘Jeypore’ in Koraput District havebecome the ideal cases for emulation inuser fee collection, their properutilization and delivering expectedservices to the people. However, in mostof the cases this option has not been triedout with commitment by the healthprofessionals in spite of the fact that it hasgreat potential for raising crucial resourcesfor the health sector. With a little morecommitment the facility user can go backbeing more satisfied and that will eventuallyincrease the chances of more user feecollection. Some health administratorssitting at the headquarters also express

their unhappiness with the systemsimply because they have lost controlover some finances. They are skepticalof the proper utilization of resources thatare raised at the hospital level becausethey think that they are always the bettermanagers of public funds. Their‘heartburn’ can be understood from thefact that even for petty expenditure thedistrict health administrator used tocome to them asking for allocations.They are obviously annoyed becausetheir role in control over resources hasmore or less decreased. They spare noopportunity to dub the new system aspeople’s welfare retarding. This is anothercrucial point to cite the unpreparedness ofhealth sector personnel to accept the newernuances of reforms.

The ordinary health service usersomehow has not been put high on theagenda during this period although clearindications are there on behalf of the donoragencies asking the government to introducesystems for such changes. The healthsystem has somehow become a hostageto the needs and aspirations of thepersonnel who are getting paid for theirwork. There is more concern amongthese people when attempts are made tomake them more accountable or todeliver the goods properly. Their voicesget shriller whenever they think thattheir interests are going to suffer onaccount of attempts for bettering thesystem in favour of the rural people. The


political class has never been able toconvince them to do the needful or acceptthe change. How after all the people are tobe given better service if their voices are notheard or they are not made party to decisionsthat ultimately affect their future? What kindof reform measure needs to be taken toensure a people-centric approach? Theanswer is not unavailable. There areinstances in our own country in states likeKerala and Andhra Pradesh where the ruralhealth service delivery mechanism has beenlinked with the Panchayat systems ofgovernance. The time has now come fortaking the right initiatives for achievingdesired changes that percolate to the lowestlevel.

Somehow or the other, the finermessages of economic reforms have notpercolated well in the health sector. Theefforts for systemic changes, less governmentintervention, facilitating communityinvolvement in deciding the nature of primaryhealth service delivery mechanism, searchingfor alternative and viable sources ofresources within the system, raisingperformance levels of the health sectorprofessionals have not been made at all.

The ‘Vision Document – 2010’recently developed by the GoO and the‘Draft Health Policy’ document reflecta very tall order for the achievements tobe made in the future as a part of theoverall reforms initiatives. Obviously,there has been enough indication in the

document regarding the crucial role ofexternal assistance for achieving a‘reformed health sector’. The followingare some of the key highlights of the futureagenda of action in the health sector ofOrissa.

i. Substantial reduction in IMR,MMR, communicable diseaseburden and effective check on non-communicable diseases.

ii. Better distribution of publicprovided services in terms of equityand geographic access.

iii. Partnership with private providersin comprehensive health care.

iv. Professionally managed hospitalswith personnel skill upgradation andstaff motivation.

v. Differential charging of healthservices.

vi. A mix of financing options includingcommunity financing, healthinsurance and government financingkeeping in view the increasing fiscalconstraints.

vii. Health and Family Welfare servicesto be charged at cost for peopleabove a particular income level.

Some of these long-term objectivescan only be achieved through a broad-basedreform initiatives and the key to the successfulachievement of these is a larger role for thepeople’s participation. These objectives alsoreflect user cost collection as a crucial inputfor financing the health sector needs. Wide


ranging partnerships with a variety ofstake holders, differential charging ofhealth services, full cost recovery fromsome targeted population, equity andgeographic access are very crucialelements for any health sector initiativesand these action points are very well intandem with the overall reform processof the economy as a whole. The future ofhealth service and achieving the ultimate goalof ‘health for all’ will only be a reality if strongand determined steps are taken by all thekey players in the health sector.

In order to achieve these, it isrecommended that a serious attempt for

fusion of initiatives by the health providers,community leaders, health administrators,health sector researchers and non-government organizations should be madeto achieve the long-term goals. For this afurther identification of research goals in theareas of user fee collection, networking forpublic-private domain partnerships, scope,feasibility and methodology of differential feecollection and areas for greater communityinvolvement is necessary to give furtherimpetus to policy making and targeting ofachievable and deliverable goals within areasonable span of time.


References

1. Project Proposal, Area DevelopmentProgramme, Phase-I, Health & FamilyWelfare Department, Government ofOrissa, Bhubaneswar.

2. Project Proposal, Area DevelopmentProgramme, Phase-II, Health & FamilyWelfare Department, Government ofOrissa, Bhubaneswar.

3. Evaluation Report of Phase-I of ODAProject, MODE, New Delhi.

4. Guide to Orissa Health & FamilyWelfare Project, Phase-III, Health &Family Welfare Department,Government of Orissa, Bhubaneswar,1997.

5. “State Health Systems, Orissa”, A PaperPrepared by a Team of Officials andNon-officials Coordinated by thePrincipal Secretary, Health & FamilyWelfare, Government of Orissa,(March) 2001.

6. Integrated Orissa State Health Policy(Draft), Health & Family WelfareDepartment, Government of Orissa,Bhubaneswar, (September) 2002.

7. Orissa Health Systems DevelopmentProject, Project ImplementationPlan, Health & Family WelfareDepartment, Government of Orissa,

Bhubaneswar, (April) 1998.

8. Orissa Health Sector Strategic Review(Part 2-Main Document), LiverpoolAssociates in Tropical Health Limited,Liverpool, U. K.

9. Project Memorandum, Orissa Health& Family Welfare Project Phase-III,Health & Family Welfare Department,Government of Orissa, Bhubaneswar,(August) 1997.

10. Norm-based Guidelines for thePreparation of District Plan ofOperation, Health & Family WelfareDepartment, Government of Orissa,Bhubaneswar, (August) 1998.

11. Sector Investment Programme inHealth, State Action Plan, Health &Family Welfare Department,Government of Orissa, Bhubaneswar,(May) 2001.

12. User Charges in Orissa: EvaluatoryStudy on the User Charges inGovernment Hospitals in Orissa,Institute of Management in Government,Thiruvananthapuram, Kerala,September, 1999.

13. External Assistance, 2000 – 2001,Ministry of Finance, Department ofEconomic Affairs, Aid Accounts andAudit Division, Government of India.


Persons Interviewed

1. Ms. Meena Gupta, Principal Secretary,Department of Health & Family Welfare,Government of Orissa.

2. Dr. Suresh Mishra, Consultant, OHSDP(World Bank Project) & FormerProject Officer, OHFWP (ODAProject).

3. Dr. Jyotsna Pattnaik, Project Officer,OHFWP (ODA/DFID Project).

4. Dr. Anusuya Das, Consultant, EuropeanCommission’s Sector InvestmentProject & Former Project Officer,OHFWP (ODA/DFID Project)

5. Dr. Vijay Pillai, Consultant, DFID,Orissa

6. Ms. Supriya Pattnaik, Head of OrissaState DFID, Bhubaneswar.

7. Dr. Siba Kumar Rath, Consultant,European Commission’s SectorInvestment Project & Former CDMOof Cuttack and Bolangir Districts.

8. Dr. P. K. Acharya, Former Director,Health Services, Government of Orissa.

9. Dr. Ranjana Kar, Assistant Director,SIHFW and Former Statistician,OHFWP (ODA/DFID Project).

10. Mr. N. G. Bal, Statistical Advisor,OHSDP (World Bank Project) &Former Assistant Director, Statistics,Government of Orissa.

11. Mr. Ajay Seth, Director, DEA,Government of India.

12. Dr. Seba Mahapatra, Director, HealthServices, Government of Orissa.

13. Mr. S. K. Naik, Secretary, Health,Government of India.

14. Dr. B. P. Mahapatra, Head, Orissa StateUnit, UNFPA.

15. Dr. A.C. Dey, CDMO, KeonjharDistrict, Orissa.

16. Dr. R. K. Paty, Deputy Director, OrissaDrug Management Unit, Bhubaneswar.




Documents

EXTERNAL ASSISTANCE FOR HEALTH SECTOR: TRENDS AND …cmdr.ac.in/editor_v51/assets/mono-47.pdf · 2. Economic Reforms and External Assistance: General Trends in the Indian Context