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Key Policy Issues for Effective Health SectorDecentralizationRunana HuquelNasrin Sultana2

Decentalization is one of lhe major elements of bealth sector reformrn many devetop,ng countries. In the heallh scctor, decentralization.involving a variery of mechanisms to tmnsler n.".f. "O.iri.t ai"",managerial and/or political authority for health service deliverv fromthe central ministry of health to altemative institutions has beenpromoted as a key mechanism of improving health sector performance.Though decenhalization has beeo considered as an impo ant changefor tle n-roer- essive dwe,opment of the healtf, u.to, it- upp""rs-to 3"rare for the health s:ctoi to take the initiative. n"c""t Airatio" poii"i".are usually adopted by the central govemment and oolv subsiuenrtvby the healtb sector. The govenunents have injtiated national ooticie'sby rssuing decrees !r by adopling constitutional changes that set thePatleT fol ,!" f.fonT.. tobe adopred Uy ttr,: aifJent ministries,rncluding the health ministries in developing countries. New efforls oidemocratizatioll alrd modernization of ore stle have treneJ misprocess.Decerfralizatien is often considered as a one-off event to tiansferpower at one time and in one quantiry to the new institutionalIocations. That roay Dot be true in mosl settings because variations aodchanges do occur over time in the process ofdecentralization. In facrdece.tralizatioD is a dynamic relationship ofchaoging powers betweenthe. centre apd rhe. periphery rather ttran grantinglffitt p";* i; ;;peqrhery. In practice, these different b?es ofds:entralization are usedat the same time for djfferent furctioos and may not necessarilv beFl"d h 991. pure form. The purpose of the anicte i", rh"."f";;, i;rnterpret different forms of health sector decentralization and lheirrespective weakness and s$engths so as to idelrtifo the kev oolicvrssues lhat need to be considered for the successful imptemeniation oidecentalization in the health seclor ofBangladesh.I Assislant Proressor,Illstihle ofHE ttb Economlcs. Uulersiry ofDhata.- Lecnfer. Institute ofHert0 Economjcs, UnivEiry ofDhaka.


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r { ' rqT "&i':74 The Dhdko Unn errity Studies, June 2004The paper has been organized as follows: section two discusses themain approaches to and forms of decettralisaliou along with theirstrength and wealotess, section three aaalyses the rationale fordecentralization, and section fout shows the experiences of healthsector decentralization in developing countries includilg Bangladesh,section five identifies the basic conditions for &e successfulimplernentation of decentralization. Finally section six puts forwardconclusion and policyrecommendation.Approachqr to and forms of decentralisationThe telm 'decentalization' is used to describe a wide variety ofpowerhansfer afiangemetrts and accountability s]sierns. It is basically atransfer of authority 10 make policies and decisions, carry outmanagement functioru, and use resources. It i$,olves the passing ofthese from central govemment authorities to such bodies as localgovemment, field administration, semi-autonomous publiccorpontioN, area wide developmsnt organizations and fu ctionalauthorities (Collins, I 994).Therc are two broad approaches to decentralisation ---- a socialdevelopment approach and a market approacll. Acco.ding to theformer ideolory, decentralizatio[ can be adopted as a vital principle ofa pdmary health care approach, particularly in enhancing equity,intersectoral .collabor"ation and coEmurdty participation. The laterapproach sees decentralisation as a mears of promoting privatizatiorqan ingedient of quasi-market in the public sectoa bureaucracies, and asa way in which the advantages of small elterpdse management may behcoryorated in the public sector. The policy makers, tierefore, need tobe very clear about the approach to dece[tralization in order to theformulation and implementation of decentralization policy.

, There are also different organizational forms ofdecentralizalion. Theseforms are not always clear-cut in practice, and couDtries tend to mix anumber of diflerent forms of decentralization in their governmentsystem. Hence it is, important to idertify the direation ofchange and tounderstand how the different systems relate to each other. This section,therefore, presents a brief outliue of the differcflt forms ofdecentralization and highlights their strenglhs and weakness.


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76 The Dhdka Uniyewity Studies, June 2004Another form of deconcethation is thg integrated prfectoral system,which is explained by Smith (1985). Here the key figure is the prefeci(senior government official) who is appointed by and accountable tothe central govenment. There exists a line of command between thecentre and the tocal level, the prefect being the representative of thegovemment and '...embodies the authority of all miaistries' (Smith1967). Ministerial field officers are subordinate to aud communicatewith the center principally through the prefect. This system isillustrated in the fotlowing figure 2:Fig 2: Decentralizatiotr as prefactoral deeotrcentratiotr.-.main linemanagerial control.

Regional prefect

DivisionavRegi6nal Healh Ofrce/Officei OtUr t' t"i"ri".lOiri"i..ar,t"giorui

----71 DNtrict prEfed,,/-District Health Office/Officer Other Ministries District Office/Omcer

Thana./Upzzila Health Offi celOlfi cerThis system is more usually associated with France, aDd is to be foundin its ex-colonies. The direct rule exercised by the British over Indiawas an exarnple of prefectoral s)rstem of colonial administration(Collins, 1994).


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$.+1 {' 1r:r:.,Key Policy ks]arjfot Efecrive Heatth S?rtor DecentatizationDecetrtralizatlotr as devolution

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The secold major form of decentralization is refered !o ar devolution.Accoding to Rondirelli (1983a), -it involves the transfer of functionsor decision making authority to legally ircolporated localgovemments, such as centro, districts or local level." In dwolution, thedecentralized units are normally characterized by (Mawhoodlgg3):slatuary recognition of the right to cooduct their own budgetarangements, a clear legal existence with corporate status, a multifunctional role, the authority to take decisionJ on the allocation ofresources invoMng revenue raising and expenditurc, personnelmanagement, logistics management, and, appointmeirt and election ofkey reprresentative members ftom a differint constituency to higherIevels of govemment. In fact, devolution is rhe ireation- orstrengthening of sub-national levels of govemment (often localgovemmert or local authorides) that arc substantially hdepsndent ofthe national level in respect to a defured set of functions. Theynormally h,ave a clear legal stahE. recognized geogaphical boundarieqand a number of fitoctiolts to perform, and a statutory authority to raiserevenue and conbol expenditue. They are rarely completelyautonomous, but are Mies largely irdepfideot ol the nitionalgovemment in their areas of rcsponsibility .ather thar subordinateunits as in &e case ofde-concenkation. In the health sector. devolutionimplies much more radical restructuring of the health serviceorg{tizatiol thalr de-concentration. The concept of devolution isshown in (the figure 3).below:Fig.3: Decentralization as devolutiorl , iBtergovernmentalrelations;


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The Dha*a University Stu.lie:, June 2004Dectrtralization througt delegatiolDelegatioB refe6 to tmnsfer of firnctions and Iesponsibility to the locallevel to achieve greater e{ficiency by increasing cost control, flexibilityand rcspon-siveness. The ultimate responsibitity iemains with thecenaal goyemment but its age s have bload discietion to carry out itsspecific firnctions atrd duties. ID the heatth fietd delegation has beenused to manage teaching hospitals, for example. Delegation has alsobeen used to organize the provision ofmedical care filanced by socialinsuralce. Delegation is not compatible with de-concertation. If themanagement of entire national health sen ices is delegated to aseparate organization, the rcle of the ministry of health would beconlined to strategic and policy issues.PrivatizatiotrIt involves the transf$ of goyemment frrnctions !o voluntaryorganizations or to private plofit making or non-profit making (or non-govemme al) organizatioN, with a variablc degree of govemmentrcgulations. Silce many govemments cannot afford any majorexpansion of health setvices or even maintain existing services, theyneed to seek altemative sources of financing and sewice prcvision.Financing mechanisms may include &ee sr:rvice delivery by non-govemmedal organizations, indirect or thid party payment in theform of va ous insurance schemes, or increased direct collsumerpa),rnetrt oI "cost-lecoyery" (though with substantial pubtic flrnding).In such cases the options for service delivery may involve non-goyemmental and yoluntary organizaiions or greater relialce on theprivate sector.Ratiotrale behitrd DecentralizatiotrThere are many complex reasons why govemmgnts in variouscountries have started or are begiming lo stat decentalizirig theirhealth services. Looking at the histodcal pqslrective and analyzing thercasons for the decenkalization of policies and their evolution, it isevidert that different local factors have played a major rcle in differentcouDaies, e.g. political ide-ology, demand for more regional autonomyand the oed io rationalize overburdned ard ou&noded a&ninistrations(Ihomasoa 2004).


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Key Policf ktuesfor Efective Heakh Sector Decentratization 79The objectives of decentralization have been dive6e. Many countrieshave realized the need lo strenglhen peripheral and local authoriliesand have adopted deceDtralizatioB as one of the major means ofimplementing reforms for better efficiency, quality and equity. On aphilosophical and ideologicat level, decentralizatio has been seen asan important politicat ideal, providing the means for communityparticipation and local self-reliance, and ensuring the accountability ofgovemment officials to the population. On the Faglnatic level,decentralization has been seen as a way of overcoming irBtitutional,phlsical and administrative constraints on development. It has alsobeen seen as a way of traNf{dng some resporsibilities for developmediom the centr to lhe periphery. (Crwe et al,2&2).The 1990s wihessed globalization occupying centre stage at bothintemational and national policy debates along with the issue ofdecentralization. Within the health sector, deceotralization of finances,through unlied/un-earma*ed $ants and responsibilities, emerged asan important topic in the agenda ofnational goverrrne[ts, intematiolalorganizations and development ageIrcies. The ircreasing trend towardsprivatization ofhealth services and the expansion of the private sectoras a motol of economic growth has fostered closer partnerships inhealth. Globalization has also inlluenced the community structure,family values, life styles and the disease pattem. A decentalizedryrtem k considered to be morc able to address these changingsituations by actitg promptly and appropdately accoding to the localenvircnment In additio4 globalization has enhanced the spiead ofmarket-orielted reforms in health. The economic decline in developingcountries has eroded public health rcsources resulthg in widespreaddegadation of health infrastructure and decline in the health status.The poorest section of the population is affected the most ftom theincreasing inequity in health. Decentralized self-goveming localinstitutions are seeIl as a vehicle for identifying and reaching the poormore effectively and for mobilizing additiorul resources for publichealth.


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The Dhd*a UnhlersiE Stl1(lies, June 2004Health sector detentalization also has several theoretical(Mitls el aI. 1990). These irclud,e the potential for:

a more rational aad unified health service that cateN to localpreferencesimproved implementation of health piogramsdecrease in duplication of services as lhe target populalions aremore specifi cally definedrcduction ofiaequalities between rural and uban areascost containment &om moving to streamlined targetedprogramsgreater community financing and involvement of localcommuDities. greater integration of activities of differcnt public and pdvateagencies. improved intrsectoral coordination, particularly in tocalgovemrient snd nral deyelopmed actiyities.

Exprietrce of Ilealth Scctor DecqrtralisationThe various forms of decentralization prcserf different challenges andopportunities. The most apFopriale form of decentratization dependson the situation and contcxt of the specific @untry. Health protriemsare not the s{ulre across societies and cult$es, and health and socialservices are organized differcntly. Morcoyer, the demoqatic processand socio-economic conditions are differert; public vsrsus pdvateproviders, including NGOS, are playing different roles; and qountriesor even different states within a targe coultry are at different stages ofdevelo,pment. Thus, different forms of decentralizatiotq fiom de-cotrcentation to privatization, may be appropdate under differecircumslances.Decetrtrllisrtiotr itr deyelopinB coutrtriesIn Philippine, the devolution of health services nas the major factorcausing significant changes in the fiscal $,stems in the health field.(Charles and Stover, 1997). While in Zambia, functioqaldecetrtralization facilitated effctive techrical supervision &om thecoutle to the periphery and maintaining the policy cohesion within thehealth system, decenaalization in the form of devolution laid the trasis


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Key Polky hsues for Efectiye Health Sector Decettalization 8 Ifor a multisectoral approach and community involvement in Uganda.However, devolution also ted to health policy and systemsfragmentation and inequity in Ugarda (Jeppson and Okuonzi, 2000).Evidence from Colombia and Chile suggests that decenhatization,under certain coflditions and with some specific policy mechanisms.can improve equity of resource allocation. h these countries, differentforms of decenkalizatio! ld to equitable levels of per capita linancialaliocations at the municipal level (Bossefi, Larrarl- aga, GiedioD,Arbelaez & Bowser, 2003). However, decenaalizatior has failed iflsome counaies in Asia and Africa h the absence of skilledprofessionals, adequate financial resorrces and appropdateinliastructure. In Bangladesll a weak institutional base, rmwillingnesson the part of the certral actors to delegate authority at the local level,and strong resistarce ftom health-related human resouces limiteffective implementation of decentalizatioq (Pokharel, 2001)In Senegal, under the decertralized health systern localb, electedleaders allocate resources to health services. However, it is found thatthe elected leaders are more likely to channl resouces towards thoseinterventions that havs the highest visibility and are thus most likely toget them reelected, They tend to cite tangible invshnetts, such asmedications, inftastructure and equipment (padiculady ambulances) aspriorities in health rather than allocati[g resources for family plarmingand reproductive health se_rvices (Wilson, 2000).L1 Mozambiqug the decenaalization_ of resources was erfectivelypromoted in dre health sphere (Mackintosh and Wh,4s, 1988). Theprocess of decenAalization in health planning and financing led io ashift in relative, and sometimes absolute terms, ftom city hospitals toiral clinics; from complex medical intervention to simplerprocedues; from doctoN to para-medicals; and ftom curative topreventive care, There were, however, many goblems with this systemas the health worke$ could not be flnancially supported and it wasolien difficult to maintain adequate basic supplies (Mackintosh andWhyts, 1988).It is, &erefore, clear that there is no unique formula, nor any simpletechnical fix for meeting the health needs in ar effective and efficientway maintaining quality and equity. What is needed is a right mix ofapproaches. However, though the above foms of decentralizatioo are


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The Dhak Univtrsitt Studiet, June 2004useful for identirying the institutional location ofthe qewly lraosfelledpowers it tells us little about the crucial aspect of deciatralization:namely, the range of choice that is granted to the decision-makers aithe decentralized levels. Decentralization, of cou$e, is not easy toinplement in practice, as it is a process, which may take as long as l0to 20 yea6.Decentnlizatiotr in the health iector of BlDgladesh: Scope atrd forrtrThough Bangladesh has achieved rernarkable success in its health arrdpopulation sector over the last three decadeq a number of challengesstitl remain urmet. Along with increased covemge and quantity ofservices, improvement of quatity of care and economic efficiercy inresource utilization has to be ensued for development of this sector.The recent Heallh, Nutritio[ and Population Sector prcgramme(HNPSP) also has similar targets in respect of coverage and quality ofservices. Given the gro*ing scarcity of resouces for the sector, theway to increase covemge and quality of services is to intensively usethe existing facilities alld efficient allocation of the resouEes to thesectoral activities. In this context, there remain ample scopes forfinancial and managerial decentralization in the health sector ofBanglades[ which in turn ca help in achieving the dual goals.Financial.Decetrtialization for elficient allocatiotr of,resourcesBangladesh is divided into 64 Districts in which there is a hospitat withbetween 50 and 200 beds. These dishicts are divided into sub-districts(upazita) each with an Upazila Heatth Complex (31 beds) and Unions,most of which have a Halth and Farnily Welfare Centre (UIIFWC).Below the union level the s]stem depends on community workers(Ensor et dr,200l).As a clifit -.oiiented servicg Essential Servico Package (ESp) is beingFovided on a one-stop basis. The service delivery has been shiftedfrom domiciliary to static site services at the community clinics (CC),each serving 6000 populatiors (GOB, 1998). ESP is delivered in athree- tiered service delivery model (FigwE-4), with the UpazilaHealth Complex CIHC) at the sub-district level, Upazita Health arldFamily l[elfare Cenhe (UHFWC) at the union level, and the CC at theward/village level (Saxker, 1999).


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Level No of Facility Avemge population sewed

1I

Upazila HealthComplex

Union Healthand FalnilyWelfare Ce[treNewly coDstuctedColr[rurity Clinic(cc)-13,500

Key Policy Issue: for Efe.rive Health Sector DerentrdlizationFigure-4: Tiers of ESP Deliyery ir Rrral Areas

Aapted from Sarker (1999) pp 8h Bangladesh, the diskict and sub district allocations are deteEninedby norms that relate to the number of beds for food and drugs, andstaff in post-for salary. During 1999/2000 a 50-bed district hospitalreceived an allocation of around 7 millions Taka and a sut -districlfacitity between 3.5 and 5 millions Taka- A UHFWC received around240,000 Taka for stalEng and supplies (Hossain et al, ZOOI\.GOB prepares two separate budgets, Developmetrt Budget andReverue Budget, by differcnt institutes ard stall, and at differed timesofthe year (Ensor et a/, 2001). A uew cadrc ofLine Directo6 has beencreated to prepare the deyelopment budget. Under the coorditration ofthe Joint Chiefs of Ptanning in the MOHFW, they Eepare theoperational plans. The Dircctor General oIEces of Health and FamilyPlanning prepare the rcvenue budget (HEU ard MAU, 2001). Hence,there remains lack of coordination betweea the two hstitutes inpreparing budgets. Budgets for most categories of regular expenditureare also detemined centrally.The budgeting sFtem ir Banglade,sh is centralized which createsseveral problems. Once budgets have been agreed with the Ministry of

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84 The Dhaka Utive.rity Studie\, Jurc 20UFillance, movemelt of fimding from pay code to another code as wellas between lines is not permitted (HEU and MAU,2001). Althoughsometimes decisions need to be taken imrne-diately, due to thecensalization it requires lots of time to get the permission of the top-level policy makers and managers to make decisions lt offen results infinancial 1oss. Moreover, the priorities of local people often differ ftomthose of donoG, and of central level policy makers These local needscan be incorponted ir planning and decision making tlrough financialdecentralizatioB.It is, therefore, necessary to decentralize the planning funclion gYerservices incorporating a degree of Enancial autolomy and flexibilityover line budga (Hossain e, a/,2001). Ther:efore, a stro[g-.centlallevel, within i clear fi'amework of equity. should accomplish thegeographic resource allocation. Resources carl be allocated in broadfinancial terms considerilg the needs ofthe de.lentralized managementareas, while local maoagers vrill determine the detail ways to use suchresources and hence budgeted.Along with the rcsources received ftom the central lwel' if the locallevel can adopt resource-generating mechanism (such as, user fees,drug revolving nmds) under the decentralized system, they canreinvest it for quality enhancement of services at the local level'Matragerial dctrtralizatior for itrtensive use of existing facilitiesEvidence suggests that staffcost constitutes 52 percent ofthe total ESPservice delivery cost at UHc level while 34 percent of the total ESPcost at UI{FWCS is compdsed ofstaffcosts (Fdousi, 2001). However'the findings of some recent studies shorred that many health centres inBangladesh are not fully utilized and mosl staff have slack time(Ferdousi, 2001). It is ctear that available resources can be used more"ffi"i*tly f.""ing op resources for expanding activities (I{owlader eral. 2004). GeneraUy docto$ allocate 40-50% of their time to inpatientduties i; District and below levets of facilities. The high proportion ofthe stalf slack time is arisitrg due to krck of modtoring andsupervision, and due to lack of coordination between the cenaal andlocal lwels. Hence, there exists great oPporhmity for effrciency gainsbecause the san1e manpower and oYerhead cost could serve asigLificantly larger number of patients in these facilities than iscurrently being served.

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Key Poli.r lstues fot Effectue Heakh Seeto. DecentratizanonTherefore, in order to use the existing facilities intensivety the HealthSector of Bangladesh has to increase efficietrcy iIl managernent in thepublic sector, !o enforce regulations for the pdvate sctor, and carryout some sorts of privatepublic mix. Managerial decentrirlization inthe health sector is a prcrequisite to carqr out these change,s. This mayinvolve gleater flexibility of the local level for staff recruihnent,procurement ofsupplies, incentiyes struch[e and so on.Appropriate approach atrd form of decetrtralizationThough the CovemmeBt of Bangladesh (cOB) is constitutionallyresponsible for the direct provision of the basic health carerequireme[ts to all levels of the people of the society, in recent yea$the role of Ministry of Health ard Family Welfare (MOIIFW) as amonopoly provider is chalging to a commissionq of health services(MOHFW, 2003). In Bangladesh, the NGOS play an important role inproviding health, [utrition and family welfare services at the grass rootlevel and thereby comptemert MOHFW efforts (MOHFW, 2004). NcOshave a compamtive advantage in providing heaith cale service,s as theycan work closely with communities (MOHfw, 2003). Hence, cOBintends to develop a SAategic Framework for NGO conaacting, topurchase health care services in 350 Union Health Complexes for thenext three years and to sign cotrtracts with NGOs in 200 Unioru(MOUfW, 2003) Contracting out health services to the NCO8 andprivate providers is one method of pdvate-public mix a:rd it is aneffective marketisation measure which can increase efliciency,improve quality and reduced financial burden of the govemment.Considering the above situatior the cOB has attached special emphasisorl the contacting out of health servics in the agped action plan forreform agelda with Donor.Evidence, therefore, suggests that COB is planning to adopt a 'ma*etapproach' in the health sector ofBatgladesh. HeIIce, under the reformprocess financial arld managerial decenkalization can be inlroduced asa means of promoting pdvatization and as a way in which theadvantages of small enterprise management may be incorporated ir thepublic sector. In this context, a mix of delegation and privalizationwould be the suitable form of decentalization in the health sector ofBangladesh.


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The Dhaka Untue\ity St|dies, June 2001In case of the existiog public facilities, respoosibilities can bedelegated to the local level govemment body. Under the system, theultimate responsibility witt rsmaias with the cental goverrunent ardthe local level will have broad disoetion to carq/ out its speci{icfinctions aDd duties. The local level witt wo* as a semi-autonomousagency attached to the ceot at level, and wilt be responsibte forrecruitment of staff, budgetiry, procuremnt alrd other matters, andperforming the prescribed firnctions by Ministry of Health and famityWelfarc (MOHFW). The role of MOHFW urtder the process will bepolicy formulation and strategy making.In order to increase coverage aad improve eflicisncy, GOB is plamingto conhact out of health services to private se.tor. Under thecontractual relationship, privatization caII be adopled as a mgans ofdecenhalization. It will irvolve the transfer 01'govemment functions tovoluntary organizatiotrs or to private profit making or Iron-profitmaking (or ron-govemmentat) organizations, with a variable degree ofgovemment regulations. The system will involve new fnancingmechanisms, such as, indirect or thhd party payment ilr the folm ofvarious insuraoce schemes, or uso fees.Basic coldltions for the snccisful implement&tioD of decetrkelizationIn Bangladesh, a weak institutional base, unrvillingless on the part ofthe cental actors to delegate authority at lhe local level, and strongresistance frorr health-related hurnan resources limit effectiveimplementation of decedtralization (Pokharel, 2001).Decentralizatiod works well if sweral key elements are in place. Theseinclude formulating clear goals, carefully defining the botmdariesbetweer the functions controlted by central level managers and thosecodtrolled by their field counterparts, and helping to build local lwelcapacity by prcviding maoagerial, as well as technical, suppolt to Eeldactors (http ://www.rsprohealth.or9.Though deceltralization has flumy clear advantages, developingcountries often make little preparation for the successfulimplame ation of decentratization. The gove,rnment of less developedcountries should take morc steps for succ$sful implementation ofeffective decentalization (Cassels, 1997). This section, therefore, aims


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Ker Policy lsr,es[ot Efectite Heahh Sector Decentalbatiorl 8Zto identiry the majol issues that need to be taken into account for thepolicy fomulation and implementation of decentalization irlBangladesh.Political commitmetrt The t,laisfer of po\ne. according to propetorder ar1d line malagement under decentralization requires appropriatepolicy alld legislative changes. The commihnent on the part of therelevant political leaders both at the natioml altd local levels is,therefore, the key prerequisite to take necessary actioas for suchchanges.CoNtitutional atrd/or legislative framework: h ordor to reioforcethe legitimacy of the political decision ard commitment for e{Tectivedecentlalization, a constitutional and/or legislative &anrework isrcquired.Finatrcial deccntralization atrd rsource mobilization: Financialdecentralization is essential for the successful implementation ofhealthsector decentralizatioL Hence, in ordea to ensure a secure andadequate revenue base for lhis sector, the central govemmtrt needs todecide or the allocation of filnds to decenaalized entities. Moreover,the govemment should make appropdate legislatile and/oradministrative arrangements for several issues, such as, levels anddistribution of health spending, i[come soulcs, fiscal autonomy aadIocal discretion in expenditure decisions.Matragemetrt functionsi ln order to minimize unnecessary duplicationand overlap as well as to maximize the ellicient use of scarceresources, an efficient division ofresponsibility among dilTerent levels(centre, regional and district) is crucial. The roles and rcsponsibiiitiesof each level must be in accordance with its capability. Moreover, a setof explicit and transparent rules defining who has authodty and whowill be held accountable is necessary.Humatr resorrce mtnagement: Conkol oyel hurnan resourcemanagement is a critical component of a coherent sl!'ategy otrdecentralizatio[ so as to impaove health sector performance. Hence, anappropriate legislative ftamework is required to ensure an zppropdateand transparent process for recruiting retaining, developing and


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88 1he Dhaka Urtuersity Studies, Jme 2004motivating men and women of appropriate caliber for the health sector.It is also importaot to improve the quality of the professionals involvedin the health service delivery and, fu many cases, re-professionalizatioo of the public service.Community participatio[ It is expected that increased involvementof the community under the decgntrulized management of health carewill be more responsive to the looal needs. HoweYer, the communityneeds to know the type of services provided, arrd the cost and qualityof service provision to dema[d effective govematce and servicedelivsry. Hence, the decentralization process neds to provide ways toenabling communities to dircctly participate in local decision-makingaflbcting health services delivery.The role of local level ard ctrtral Sovertrmetrt The rolo of bothlocal level and cenkal governmsnt is more important for successfulimplemedatiotr of decentralization. It is often argued that primaryhealth care services are the resporuibitity of 0re local government andthe cerltlal govemments remain responsitr]e for secondary andspecialist services. So for better primary health care services the sKlldevelopment and capacity building of local organizations is essential.Besides this, for successful implementatiol! of decentalizatior! thelocal levels have to be more accountable to the central level for theiractivities. Strengthering rEgional and district health authorities is alsoneeded so that they can assume greater responsibilities. On the otherhand, the centrat govemmeot (health ministy) should have to givemore emphasis on the fomulation of policies rclated !o health sectorpriorities, equitabte resouce allocatioq itlisessment of hoalth s)tstemperformance at both local and national levels, plomoting basic andoperational research, and maintaining liaison with i emational healthorganizations and aid agencies.However, rapid implementation ofdece ralization creates a major riskof breakdown in the delivery of public health services because thetaditionally centralized planning and management of health servicesmay not prcpare local staff to take over this respoffibitity. There is a


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KeJ Policf Issuesfot Etectiye Heakh Sector Decentratization Bgned to sup] ort local heat*l stalI dudng the transition period andprepare them for lheir new rcsponsibilities (http://www.abd.org, 2004).Conclusion aq4 policy recollmetdatiorDecenhalizatior can be a powerful instrument to imEove healthsewice delivery. However, effective decenhalization carmot restsimply on the hansfer of authority, f&ctions aod rcsources Aom ihenational to the local authorities. Different foms ofdece[t.aliza.tion canl%d to significant risks and challenges that have to be caretullyaddressed if the poterfial beneits are to be realize.d. If poorlyformulated alrd implemented, dece[Ealization can have a negativeimpact on health secto development, such as enhancing inequity,policy fragnentation, and weakening ofthe central and./or local ievel.The budgeting system ofthe health sector in Bangladesh is cetrtralized.Once budgets have belr agreed with the Minisay of Finance,moveme[t of ftnding from pay code to atothe! code as ]vell asbetween lfurcs is not permitted. This is an impedimenl for th smoothfunctioning of this secior. Hence, financial decentalization in thehealth sector of Bangladesh is essential for the efficient utilization ofresources. Moreove., fur order to use the existing facilities intensivelymanagedal decen*alization in the health sector is a prerequisite. Thipaper, lherefore, recornmends the following:

. A atrang central leyel, within a clear ftamewo!.k of equity,should accomplish the geographic resowce allocrtion.Resources can be allocated in broad financial termR cotrsideringthe needs of the decentralized manement areas, while localmanagers will detemrine the detail ways to use such resourcesand hence budgeted. For ensuring equity, the programmes of decenhalization haveto be linked to policies, for exampte, or rutional healthplarming resource allocations and community participatioo.. It is important not to overlook the role of the centre,particularly in relatior to equity issues. In a decenkalizedsystem, the centrg needs to establish equitable means forailocating resouces betwen dishicts and to erlsure the


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llt,0 The Dnakt UniveBity Sludies,Lune ZOO Itexisttrce of effective mechanisms for maDaghg the healtb Ilabour market. I. Deceotalization must be accompanied by a range of measures' Iincluding adequate training designed !o support the newly!ernpowered local auttrorities and creating a conducive Ienvirooment. !. Active involvemeot of health managers in the decentralizarion Idesign, clear oational resource allocation srandards and health Iservice norms, and an ongoing system lbr morutonng arc [esseotial for guarding e4uity aod quality and lor improving Iefliciency. Ir There needs to be significatrt skill developmeot and capacity Ibuilding in local organizations strotgthening national capacity Ifor pol-icy analysis -and research ard enhancing the quality oflintoimation available on policy changes. hstitutional ishengthening is also oeded for policy makerc and researcherc |* t![ "t iealth worken to devlop the capacities to deal Ieffectively wi& reform issues. IRefereDces l

Bossed, Thomas J., LanBn- aga, Osvaldo. Giedion Ursula' Arbelaez Jose'IJesus, & Bowser Diana M. (2003); Decntrali?ation and Equity of Resowcc Iallocation: Evidence &om Colombia and Chile, Bulteth ofthe World Health IOlganizatiin 2003. IC-assels. AM.{199D. Health Sector Reform: Key lssues in Less DetelopedlCoantflt. Discussion Paper No.l, wHO/sllS/ NHP/95 4, world Health IOrganization, Cene\, March 1997. ICharles C. Stover, M.A. \lgg7). Heolth Finu(ing, Health Sector Delivery' Iand Decentroliza,ion in the Heqllh Sector. B esmtation to the I25"' armual fmeeling ofthe American Public Health Associttion lCollins, C. (1994). Managemefl afid Orgonization oI Deteloping HealthlSrster6. Oxford Univelsity I'ress. tCreese, A. et al. (2002). Monagenent of Decentrolization of Health Care' ISEA/PDM./MeeI.39/TD/1.3 dated 26 August 2002 1Ensor T el aI. (2001) Me asuring the Impacl ofESP: Prelininary Eeidence itlBan4ladefi oiraka, Health Economics Uni! MOHFW, Research Note-22 [I

III


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Key Policy lssuesfot Efect,'y Heakh Sector Decentatizotio,t 9tEnsor T and Ferdousi S A (20011 Projecting the Cost of the Essrlluial Sen icePac&age Dhaka. Health Economics Unit and Management Accounting Unit,Policy Research Unit, MOHFW, Research Papcr-26.Ferdousi S A (2001) fte Cufte t Costs ofEssential Halth Services-a studyof Government Facilities Dhaka, Hea,l tE onomics Unit and Manageme;tAccounting Unit, Policy Research Unit, MOHFW' Research paper-25.HEU and MAU (2001) Public Expenditure Review oJ the Heahh AndPopnldtion Sector Program e,l999/2000 Dhaka, Health Eccnomics Unitand Management Accounting Unit, Policy Research Unit , MOHFW.Research Paper-19.Hossain A e, al (2001') ceographic re:ource Allocation In BangladeshDhaka, Health Economics Unit and Management Accounting Unit; policyResearch Unit, MOIIFW, Reseaich Paper-2 I -Howlader S R e, o, (20M) Ptoduclitity aid Cost of Pt btic Health Senice: i4Banglddesh l^sttn E of Health Economics, Univercity ofDhaka.Jeppsson A and Ol,rlonzi S A (2000) Vertical or Holistic Decenaalization ofthe Health Sector? Experiences fiom Zambia and Uganda .lnternatio alJoumal of Health Pldnhing and ManagementyoL 15 W 273-289.Mills, 4., Vaughan, J.P., Smith, D.L. aad Tabibzadeh, t. (1990). HeakhSyste Decentraliz.ttion. Concepts Iss,r.s anil coun ry expeience .WllO,Geneva.MOLIFW (2003) ModernitiLg Health Nutrition and populatioi Services inBarglarlesl, Discussion Draft . GOB.Poliharel, Bhojraj (2000), Decentalization Of Health Seruicer, AssigtmentReport: 20, Arugrst -17 Oclober 2000Rondinelli, D.A. (1983a). Irplementing Decent'alization progIairmes inAsia: a Compamtive Analysis. Pdric Adfiinistralion and l)eveloprnent,3,t81207.Sarker S (1999) Operation on EPSP and ESP: lssues for ConsiilerutionIntemational Cenhe fff Diarrhoeal Disease Research, Bangladcs\ Centre forHealth artd Population Research, Special Publication No.lO5.Smith, B.C. (1985). Decentralization. The territorial tlimension of the state.Allen & Unwin, London.Sen K., and M. Koiwsalo. 1998. "I{ealth Carc Refoms and DevelopingCountries: A Critical Oveaiew." Intemational Joumal of Health plan ingdnd Managernent l3i 199-215 .Thomason, J. A (2004) Eeslth Sector Reform in Developing Cntnties: ARealitv Check


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92 Ihe Dhaka aniversity Studies, &/ne zMlWilson E (2000). IDplicaiiotrs of Deccotsllization for RcFoductivr Hearr,Planninq ii SercAal Policy Matters No. 3. FunrEs GroBp it$anatiotr5l,I'Vashington, D.C.Wodd Bank (20ol) He4lh q.ste,ls Developrne t-Deenrrutization: T7P-World Bank Groq; 2001 .ht@://vww.reprohal0r-org/turia part/Weck?tMon2dScs3/Scst ricfdochttp://www.abd.org/Docru.ntdProfi lcsfi,oor#tatimsle (2004).

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