Working in Health: Financing and Managing the Public Sector Health Workforce

1. Working in Health:Financing and Managing the Public Sector Health Workforce Chapter 1 – Overview Marko Vujicic, KelechiOhiri, Susan Sparkes The World Bank, Washington, DC

2. Outline • Background • Objectives of study • Main findings – 8 key messages • Policy implications moving forward

3. Background • Important link between the availability of health workers and service delivery outcomes • Large shortages of health workers in developing countries, mainly in Africa • 4.3 million globally according to population norms • Country-level, needs-based estimates show even larger gaps • Critical need to scale up staffing levels in order to reach health-related MDG targets • Development partners have committed to training more health workers, particularly for Africa • PEPFAR (140,000) • JICA (100,000) • HLTF on health financing (1 million) Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

4. Background • Numerous factors limit scaling up the health workforce • Insufficient training capacity • Health worker migration and other labor force participation decisions • Fiscal policy Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

5. Background • Numerous factors limit scaling up the health workforce • Insufficient training capacity • Health worker migration and other labor force participation decisions • Fiscal policy • In the public sector, health worker salaries are often paid out of the government’s overall wage bill • Under restrictive fiscal policy, there are often wage bill constraints that could limit hiring of health workers • Considerable debate but little empirical analysis of • The budgeting process for health sector salaries • The impact of macroeconomic and fiscal policy on the health workforce Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

6. Background • Beyond numbers, there are other important health workforce considerations that influence service delivery • Geographic distribution of staff • Productivity (absenteeism) • Quality of care • Skill mix • Within the public sector, an important determinant of these health workforce outcomes are practices related to • Recruitment • Deployment • Transfer • Promotion and sanctioning • Pay • Little empirical work on how governments manage and pay health workers and whether current practices promote good performance • Critical issues – now more than ever given the global financial crisis. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

7. Objectives Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

8. Objectives • Reviewed available literature • Analyzed administrative data • Country case studies • Kenya • Zambia • Rwanda • Dominican Republic • Governments in all four countries restricted growth of the overall wage bill • But they differ in terms of • How health workers are employed • Policies and practices for key public sector management functions Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

9. Objectives Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

10. Objectives Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

11. Objectives Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

12. Table of Contents Chapter 1 – Overview Chapter 2 - Background country study for Kenya Chapter 3 - Background country study for Zambia Chapter 4 - Background country study for Rwanda Chapter 5 - Background country study for the Dominican Republic Appendix A - Comparative Analysis of Health Outcomes, Service Delivery, and Health Workforce Levels in Kenya, Zambia, Rwanda, and the Dominican Republic Appendix B - Analysis of the Share of Government Health Expenditure Going to the Health Wage Bill: Some Stylized Facts Appendix C - Decentralization and Human Resources for Health Appendix D - Review of Alternative Compensation Methods for Health Workers Appendix E - Review of GFATM Round 6 and GAVI HSS Round 1 Policies and Practices for Funding Health Worker Remuneration

13. Impact of Government Fiscal Policy on the Health Workforce Key Messages

14. #1: When health workers are employed as civil servants and their salaries are paid out of the overall government wage bill, the ministry of health has little authority over its salary budget. • Authority over the health wage bill budget usually lies with the ministry of finance • Since salaries account for the majority of health spending (35-55% in our focus countries) the ministry of health does not have effective control over a large portion of its total budget Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

15. #2: In such cases, scaling up the health workforce requires either reallocating salary budgets away from other sectors toward health or increasing the overall wage bill. Both are challenging. • Reallocating salary budgets toward the health sector is politically difficult • MOH often can not demonstrate results from past wage bill budget increases • Human resources for health strategies are often not results focused “We keep giving health more and more money for salaries; in the end what do we get?” (former minister of finance in Ghana) Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

16. In Kenya : “Wage policy measures will include . . . flexibility to allow for recruitment of medical personnel in order to aim at reaching the optimum level of personnel for the health sector. (Kenya Ministry of Finance 2007b: 23)” Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

17. #3: Scaling up the health workforce significantly is affordable under certain enabling conditions, but these are often difficult to meet. • Affordability of scaling up staff orincreasing wages in the health sector depends on: • Can the health sector be isolated? • Political factors • Legal factors • Allowances within control of MOH • How restrictive is overall wage bill policy ? Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

18. Health tends to make up 5-15% of the overall civil service • Education sector is 2-10 times larger • Spillovers into education (i.e. teacher salaries) are a major issue #3: Scaling up the health workforce significantly is affordable under certain enabling conditions, but these are often difficult to meet. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

19. #3: Scaling up the health workforce significantly is affordable under certain enabling conditions, but these are often difficult to meet. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

20. Indicates that there are often no fiscal constraints to hiring in the short term • Main factors include long delays in the recruitment process and the timing of the budget cycle • In Zambia we found that in 2006 and 2007 the budget execution rate was 50% and 70%, respectively. #4: Due to administrative inefficiencies, the budget for health worker salaries is sometimes not fully spent. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

21. Policy options to increase autonomy include • giving facilities more authority over allowances • using alternatives to salary to pay health workers • removing the health sector from the civil service. • Rwanda has recently delinked health workers from the civil service. • Along with a performance based pay reform, this has given facilities much more autonomy over salary budgets and allowed for increased hiring. • Bonuses account for up to 86% of total remuneration #5: Under certain enabling conditions, giving facilities more autonomy over the wage bill budget reduces the impact of restrictive fiscal policy. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

22. Human Resource Management Policies and Practices in the Health Sector Key Messages

23. When the recruitment process is centralized it is often plagued by considerable delays • In Kenya it took up to 13 months to fill a vacant position • Centralized • Paper-based • Many steps and actors involved from different ministries • The MOH was recently granted more authority over the process • Streamlined • Computer-based • This has reduced recruitment time to less than 5 months. #6: Transferring recruitment authority to the ministry of health can reduce delays. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

24. #7: Linking salaries to specific positions improves efficiency and the geographic distribution of staff. • Zambia and the Dominican Republic • Health workers often continue receiving their salary regardless of where they move within the country. • Paid centrally, no tracking system for health workers • Job opening is not necessarily created upon departure. • Rwanda • Salaries are paid locally ensuring that a vacancy is immediately created when someone leaves their post. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

25. Kenya • Over 80 different allowances • Housing allowance can account for up to 30% of total pay • Housing allowance is highest in Nairobi. Strong disincentive for transfers to regions with shortages • 11,129 employees are drawing a higher housing allowance than they are entitled • This could be used to pay an additional 200 doctors or 600 nurses per year. • Dominican Republic • Rural hardship allowances are too small to attract staff members to areas where need is highest • Allowances are used to increase remuneration in response to strikes • Not performance based #8: Allowances are an important part of remuneration, but they can often be used more strategically. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

26. Policy Implications Moving Forward

27. Main Conclusions Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

28. Main Conclusions • Government fiscal policy can limit the ability to scale up the public sector health workforce. • Health workforce policy does not operate in a vacuum • When health workers are employed in the public sector country-specific macroeconomic conditions and fiscal policies influence how much additional hiring is affordable. • Strengthening current human resource management practices would have a positive impact on workforce performance and service delivery. • Human resource management practices in the health sector can be extremely weak • Leads to major inefficiencies • If these inefficiencies are not addressed it is unlikely that simply increasing the number of health workers will have an impact on the poor • Governments have many policy options available to address the fiscal constraints to scaling up and to improve health workforce performance. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

29. Policy Options • Minor Reform • Use existing allowances more strategically (i.e. redistribute current budget to improve incentive structure) • Kenya housing allowance • Make some of the current allowances performance based • Improve information systems to monitor absenteeism, ghost workers etc. • Major Reform • Making donor aid more predictable so that it can be used to finance health worker salaries and allowances • Malawi budget support program • Kenya emergency hiring program • Reducing contractual hours and allowing dual practice • Dominican Republic • Creating a separate salary scale for the health sector within the overall civil service • Zambia • Very Major Reform • Remove health workers from civil service so they are employed by facilities • Rwanda Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.