Health sector planning led by management of recurrent expenditure: An agenda for action‐research

Abstract

Health services in developing countries face a crisis of recurrent costs. Far from being able to fund primary health care (PHC) developments, governments now have difficulty in keeping existing health services in operation. This article proposes an approach to the problem based on the proactive planning and management of recurrent health expenditure. The system addresses existing services as well as future plans and allows explicit trade‐offs to be made in resource allocation. This may be termed ‘recurrent‐expenditure‐led planning’. The article describes a diagnostic health sector review, which incorporates a recurrent expenditure profile in four planes: by type of provider, source of finance, level of care and recipient population group. A fifth dimension of time trends for certain expenditure categories can be added. The steps of a strategic planning cycle for health services resources are then described, which allows health service strategies to be tested for broad economic feasibility. It also results in the establishment of resource targets that can act as benchmarks against which actual levels of funding can be compared. The targets help to maintain sectoral priorities in resource allocation even in times of economic constraint and to channel funds preferentially to localities and facilities in greatest need. The system calls for innovations in the methods of health planning and financial management in the health sector. Implementation will require health systems action‐research at the country level. The essential purpose is to promote PHC policy‐led resource allocation and use. No amount of planning can substitute for political action to realize ‘health for all’, but this system provides technical support to the political forces in favour of distributive PHC policies. Copyright © 1991 John Wiley & Sons, Ltd.