In a publication of the World Bank on universal health care study series titled Sri Lanka: Achieving Pro-Poor Universal Health Coverage without Health Financing Reforms says that Many countries are lauded for achieving two out of three, but few can claim to have done as well as Sri Lanka on all fronts, especially considering that it is still classified as a lower-middle income country.
The study published recently indicates following information:
Sri Lanka’s health system has a long track record of strong performance. For at least 50 years it has achieved much better outcomes in maternal and child health and infectious disease control than would have been predicted by its income level. Health financing indicators also indicate that the health system is both pro-poor and efficient. There are few if any other low or middle-income countries that have simultaneously achieved strong health outcomes, good financial protection, and low cost. Many countries are lauded for achieving two out of three, but few can claim to have done as well as Sri Lanka on all fronts, especially considering that it is still classified as a lower- middle income country. The objective of this case study is to describe the main features and achievements of Sri Lanka’s high-performing health system, and to distill lessons for the rest of the world.
The cornerstone of Sri Lanka’s Universal Health Coverage (UHC) agenda has been supply-side efforts to ensure strong service delivery. It has provided universal, free access to government-provided health care services to its population since the 1930s. Preventive health care services are provided through a well-planned network of facilities across the country, each of which is led by a Medical Officer of Health. Their responsibilities include maternal and child health and infectious disease control. The separate curative care network offers comprehensive services but is less well- organized, as there is no referral system and many patients bypass lower-level facilities in favor of secondary and tertiary care. The private sector also plays an important role in Sri Lanka’s health system equilibrium, especially in the context of outpatient curative care, where government doctors can supplement their salaries during off-duty hours and patients willing to pay out-of-pocket can receive more convenient, personalized care.
Sri Lanka has undertaken relatively few health financing reforms over the years. There is no purchaser-provider split: financing and delivery are fully integrated with the national and provincial governments both funding and operating public facilities across the country. Unlike many countries, it has not opted for a demand-side financing approach to UHC which seeks to identify and target the poor. Line-item budgets predominate. There is no output, performance, or results-based financing of health care providers, no conditional cash transfers, and no social health insurance. The prevailing input-based approach to inter-fiscal transfers and provider payment has contributed to cost containment but also a somewhat unbalanced pattern of resource allocation across provinces and facility types. Sri Lanka’s government health spending as a share of Gross Domestic Product (GDP) is relatively low by regional standards and is currently constrained by a very low level of overall government revenues. Out-of-pocket (OOP) spending accounts for about40 percent of total health expenditures.
Evidence on utilization patterns suggests that access to care in the government sector is pro-poor. The bottom 40 percent is more likely to use public outpatient care than the top 40 percent, while inpatient use is quite equal across all groups. While there is no explicit targeting, utilization patterns suggest that there is implicit targeting of the poor, largely because the better-off opt out due to the “consumer experience” of accessing health care in the public sector. In particular, government operating hours are less convenient, waiting times are much longer, and provider choice is more limited. This is one of the weak links in the public system’s performance. However, evidence suggests that the quality of care across public and private sectors is similar.
Sri Lanka provides a comprehensive range of health care services, but does not have an explicit benefit package defining what is available to the population. Almost 100 percent coverage has been achieved for services such as ante-natal care, skilled birth attendance, and DPT3 immunization. While a range of noncommunicable disease (NCD) services are available, including cardiology and oncology, in reality there may be significant rationing of advanced care in the form of waiting lists or limited availability of the required specialized human resources, equipment, and drugs. A significant share of total OOP spending is associated with payments for lab tests and drugs for public sector consultations. But overall utilization rates are similar to those in many high-income countries.
OOP spending accounts for about 40 percent of total health expenditures, but financial protection is good, largely because most OOP is incurred by the rich. About half of all OOP is incurred by the richest decile, and the better-off also spend a larger share of their total household expenditures on health. Standard indicators of financial protection indicate that Sri Lanka is performing well relative to its peers.
Looking forward, the pending agenda for Sri Lanka’s health system stems largely from the challenges associated with an aging population. Addressing NCDs is a more complex task than delivering on the maternal and child health agenda and will entail new approaches to service delivery. It is not evident yet that Sri Lanka is performing well in terms of managing NCDs, nor that the health system as it is currently configured is well positioned to do so. The reforms needed to rise to this challenge will require strengthening all aspects of the health system – financing, human resources, pharmaceuticals, and information systems – to meet the needs of a more costly and complex service delivery system. In brief, the very positive narrative that has accompanied Sri Lanka’s health system performance over several decades may become increasingly untenable in the years ahead unless this agenda is successfully addressed.
Sri Lanka’s high-achieving health system raises the obvious question of what lessons, if any, it can offer to the rest of the world. These are likely to be most relevant in lower-income countries, since its successes have largely been achieved with respect to the low-income health agenda (addressing maternal and child health) rather than the middle-income agenda (managing non-communicable diseases and a more complex health system). One obvious implication of Sri Lanka’s experience is that it challenges the common wisdom about the appropriate timing of health financing reforms, and in particular that provider payment reform should be pursued without delay by all low-income countries to somehow improve “incentives” or “efficiency”. A second important lesson is that achieving excellent maternal and child health outcomes can be done with low levels of spending. The common claim that large health budgets or even a high share dedicated to primary care are essential to improve outcomes do not find support in Sri Lanka’s experience. Third, Sri Lanka’s health system equilibrium adds considerable nuance to the often-stale debate about the appropriate role of public and private sectors. At the same time, there are also several ways in which Sri Lanka appears to differ from other countries, potentially limiting the applicability of its experiences to other settings. These include better governance and the status of women.
