The grim reality of public sector health facilities in Pakistan paints a distressing picture, reflecting a multitude of pressing issues and challenges that are far from being adequately addressed. Impetus supported a provincial health system to improve the infrastructure and performance of its primary healthcare facilities through deploying fiscal devolution as a key lever.  

As our team began to understand the ecosystem of PHC in the province, we came across several symptoms of a system that was underperforming. One of the most glaring problems was the deplorable state of infrastructure. Many healthcare facilities across the province exhibited a dismal physical outlook, lacking essential functionalities. Shockingly, over 700 of these facilities suffered damage and remained neglected, never having undergone refurbishment or reconstruction. This not only endangered the health and safety of patients but also undermined the overall effectiveness of the healthcare system.

Furthermore, the absence of a consistent and sufficient medical staff presence exacerbated the predicament. Medical Officers and Lady Health Visitors, crucial pillars of primary healthcare, were irregular in their attendance, with their presence falling below 50% across the province. This glaring shortage of medical personnel compromises the quality of care and further burdens an already overburdened system.

Adding to the distress, the lack of essential medicines and critical equipment was a pervasive issue. Access to life-saving drugs and necessary medical equipment remains a challenge, with medicine availability as low as 39% and equipment availability at a meagre 77%. This deficiency severely hampered the ability of these facilities to provide adequate healthcare services to the populace.

Moreover, there was a notable absence of effective oversight and management. District officials are failing to provide the necessary guidance and supervision required to ensure the proper functioning of these healthcare facilities. The absence of district-level management routines and a lack of real-time data monitoring left these vital institutions vulnerable to continued disrepair, hindering the progress of the provincial health system.

Based on these findings, our hypothesis was that the fiscal devolution could be a means to solve issues that existed at different levels of the health department of Khyber Pakhtunkhwa (KPK). What helped arrive at this hypothesis was further understanding what drove the current levels of disrepair across the system. We categorized these issues at the central, district and facility level.  

Issues at the Central Level:

1. Neglected Maintenance and Repair: There has been a significant lack of investment in the maintenance and repair of existing healthcare facilities at the central level. Rather than allocating funds to address these pressing needs, investments have predominantly been channeled through development budgets towards new projects, neglecting the crucial aspect of repairing and rehabilitating existing healthcare facilities. Shockingly, only around 15% of the planned budget for reform has been allocated to this essential area. The existing model for repair and rehabilitation has proven to be inefficient.
2. Contracting Challenges with C&W: The Central level has primarily relied on the Construction and Works (C&W) mechanism to provide infrastructure upgrades. However, this approach has been marred by well-documented issues in the contracting process, causing further hindrances in addressing infrastructure shortcomings.

Issues at the District Level:

1. Limited Planning Capacity: At the district level, the District Health Officer's (DHO) Office faces challenges related to planning capacity. This office is tasked with planning and allocating expenditure to all health facilities, but it lacks the necessary capacity and capability to fulfill these responsibilities effectively.
2. Procurement Delays: The procurement of essential equipment and medicines under the supervision of the DHO often experiences significant delays, ranging from approximately three months to a year. This sluggish procurement process proves to be inefficient, hindering the timely fulfillment of immediate facility-level requirements.

Issues at the Facility Level:

1. Inadequate Human Resources: Health facilities grapple with a shortage of essential human resources. Aside from permanent staff on the department payroll, other personnel have limited leverage in obtaining additional assistance, such as security personnel, helpers, and cleaning staff.
2. Communication Challenges: Communication between the DHO and healthcare facilities is often weak. This deficiency arises from a lack of interest from facility staff and insufficient capacity within the DHO's office, resulting in inadequate coordination and communication regarding the facilities' needs and requirements.

We realized that the critical level was that of the facility where the citizens interact with the service delivery node. Based on this, our approach was to deploy fiscal devolution that would help accelerate fund utilization at the facility level through efficient fund allocation, release and execution. The cornerstone of this model was the Primary Care Management Committees (PCMCs).  prescribed as bodies consisting of facility staff and community members responsible for the execution of required work with funds given by the Department of Health, instead of the money being parked at the district level – see Exhibit below.

To ensure that the system was able to see intended results, we supported the devolution plan at various implementation levels:

At the Central-Level Implementation, the critical steps involve securing approval for devolution through management committees, which requires cabinet endorsement and leveraging political influence to expedite the process. Additionally, there is a need for drafting and gaining approval for the necessary laws and guidelines that inform the implementation process. The Impetus Team plays a crucial role in this phase by aiding in the drafting of guidelines and laws and engaging with stakeholders to obtain the required approvals.

Moving to the District-Level Implementation, the key requirements include receiving support from district-level leadership to understand the steps involved in implementing devolution and its associated benefits. It's also essential to encourage the engagement of facility staff in leading on-ground activities. The Impetus Team contributes by providing training to district officials on the steps involved in implementation and assisting in engaging with facility-level staff while overseeing performance management.

At the Facility-Level Implementation, the critical steps encompass creating Primary Care Management Committees (PCMCs) and nominating focal persons to lead these committees. This level also involves opening bank accounts for fund transfers and defining the scope of work required, estimating necessary funds, communicating with district-level authorities, receiving funds, and initiating work in line with centrally set guidelines. The Impetus Team's support here includes training facility-level staff regarding the guidelines and scoping of work, establishing routines for performance management, and designing data systems to monitor work progress and fund utilization.

Within two years of implementing fiscal devolution, it became evident that the impact was truly remarkable. One of the standout achievements was the significant improvement in planning and execution. The allocation of funds was now based on the needs identified by the individuals operating health facilities, resulting in a much sharper understanding of where resources should be directed. This shift in approach led to work being conducted at a substantially lower cost, making the healthcare system more efficient and cost-effective.

This newfound efficiency also brought about higher transparency and accountability. It became possible to track spending on a per-facility and district level, providing transparency in how funds were being utilized. Furthermore, the implementation of performance management routines offered better oversight to the health department, ensuring that funds were being utilized judiciously and effectively.

As a consequence, there was a remarkable acceleration in project implementation. Fiscal devolution facilitated high-quality repairs across more than 700 facilities spread across 21 districts within the provincial health system in just two years. Additionally, the procurement process for medicines and equipment became significantly faster, resulting in increased availability of essential medical resources throughout the province.

Ultimately, these improvements translated into a notable increase in public trust in the government. Facilities became more responsive to the needs of the community, leading to improved citizen outcomes. Repaired and well-equipped facilities attracted a higher patient footfall, and the quality of service-delivery also saw a substantial improvement, further solidifying the public's trust in the government's commitment to providing quality healthcare.