Differential financing of public health facilities

Excerpt

The health system in India suffers from low level of public spending and high out of pocket payment. Public health facilities are funded on a fixed and uniform basis irrespective of their needs and performance. The National Rural Health Mission has introduced an innovative approach of flexible financing to public health facilities under Untied Funds (UF), Annual Maintenance Grant (AMG) and Aarogya Raksha Samithi Corpus Funds (ARS). Funds are currently allocated @ of INR 10000 at village level, INR 20000 at subcentre level, INR 175000 at Primary Health Centre, INR 250000 at community health centre and INR 500000 at district hospital level. Though funds are allocated to health facilities with adequate guidelines and flexibility, utilization of these funds is poor. Given the limited resource available for healthcare in the country, there is a need to rationalize the distribution of funds and allocate them efficiently. We undertook a study to propose a differential financing model for public health facilities. …