Health sector financing in Nicaragua : challenges for the nineties

This report presents the results of a situational analysis of MINSA"s financing problems. The report is based on a review of studies, official documents, and proposals discussed with Nicaraguan officials and staff of international cooperating agencies. The first section presents a brief description and analysis of the evolution of public health expenditures and finance. Both levels and tendencies of expenditure and financing patterns are examined for recent years. Data are included on the contribution of foreign assistance to the financing of health programs in the 1980s, and preliminary estimates are provided of the importance of private health sector spending. Section II identifies areas for policy dialogue regarding health care financing, expenditures, and resource allocation measures that may be adopted to improve the efficiency, effectiveness, and distributive impact of public health services. The drastic reduction in levels of public spending on health in recent years is leading to an explosive growth of private expenditures and a concomitant increase in the number of private providers of health goods and services (e.g., private doctor"s offices, laboratories, pharmacies, etc.). In light of these changes in the structure and configuration of health care financing and expenditures, there is an urgent need for: a) redefining the role of the public and private sectors in the provision of health services, and b) developing an adequate regulatory framework with corresponding economic incentives and penalties to ensure efficiency and effectiveness of public health expenditures. The third section summarizes health sector financing problems that were discussed with officials of USAID/Nicaragua, and outlines areas of cooperation that could be undertaken to improve the sustainability of primary health care services. (Author abstract)