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Health financing system

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The 2007 National Health Policy commits the Government of Liberia to financing health care at the highest level possible, taking into consideration its revenues and competing priorities.

The Policy commits the Government to progressively increasing the share of its budget apportioned to the health sector, while a mixture of other financing strategies (e.g. user fees, health insurance and other forms of prepayment) will also be explored.

However, the Policy states that in light of crushing levels of poverty, the Ministry of Health and Social Welfare has decided to suspend the administration of user fees at the primary health care level until 2013, until the socioeconomic situation improves and financial management systems perform to a level that ensures the proper extraction, accounting and utilization of revenue.

This section of the Health financing system profile is structured along the following lines:

Contents

Analytical summary

In 2008, the Government of Liberia's total health expenditure reached over US$ 100 million (or US$ 29 per person), i.e. 15% of gross domestic product. This was an unprecedented level of expenditure for Liberia and was in line with the West and Central African regional average of US$ 28 per person in 2006 (WHO figures).

External donors and households accounted for the largest part of health expenditure (47% and 35%, respectively), while Government spending accounted for 15%. Government spending has remained stable as a percentage of the national budget (between 7% and 8%), but it has nearly doubled in absolute terms. Donor funds are predominantly used to support service delivery at the primary care level, while referral hospitals consume the largest portion of Government expenditure.

The high level of household expenditure was largely on private goods and services. Of the US$ 37.9 million from other sources, 93% of those funds came from out-of-pocket (or household) funds, which were spent overwhelmingly (85%) on private providers. If donor funds were excluded from the equation, household funds would in fact represent two thirds of all domestic sources of funds used for health care.

Figure 1. Government budgetary allocation on health. FY, fiscal year, Source: Ministry of Health and Social Welfare
Figure 2. Percentage of national budget spent on health and per capita health expenditure. FY, fiscal year. Source: Ministry of Health and Social Welfare

The Government's budgetary allocation to the Ministry of Health and Social Welfare has increased over the past six fiscal years (2006–2012) (see Figure 1). In 2006, budgetary appropriation to the health sector was US$ 10 913 584 compared with US$ 48 999 191 in fiscal year 2011–2012. This increment in budgetary allocations of US$ 38 million from fiscal year 2006–2007 to 2011–2012 reflects the Government’s commitment to improving the health status of the population.

The per capita health expenditure is encouraging, although Liberia is still far from achieving the required target that will influence its attainment of Millennium Development Goals 4, 5 and 6.

Excluding donors’ funds, the per capita health expenditure in 2006 was US$ 3.86 per person compared with US$ 9.34 per person in 2011 (see Figure 2). Thus, the Government spent less than US$ 4 towards the health of each citizen in fiscal year 2006–2007 compared with almost US$ 10 in 2011. Investments by the Government and its partners have contributed to the improvement of health sector indicators, especially Millennium Development Goals 4 and 6.[1]


Organization of health financing

Health expenditures patterns, trends and funding flows

Funding sources

Pooling of funds

Institutional arrangements and purchaser provider relations

Payment mechanisms

Priorities and ways forward

Others

Endnotes:References, sources, methods, abbreviations, etc.

  1. Annual report. Monrovia, Government of Liberia, Ministry of Health and Social Welfare, 2011