[🇧🇩] Healthcare Industry in Bangladesh

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We need an efficient healthcare system

Unimplemented health budget remains a major concern

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We need an efficient healthcare system
Unimplemented health budget remains a major concern

At a time when healthcare experts are urging the government to increase the allocation for the health sector to 15 percent of the national budget or five percent of the GDP, it is deeply concerning that the two government divisions responsible for healthcare delivery have not even been able to utilise their Annual Development Programme (ADP) allocations. Reportedly, over the past 10 months, these two divisions—Medical Education and Family Welfare Division and Health Services Division—spent only a small portion of the funds allocated to them, making them the poorest performers in utilising their development budget. One of them spent only 2.34 percent of its Tk 2,283.16 crore budget by April this year—the lowest among all ministries and divisions—while the other used 14.9 percent of its Tk 5,673.51 crore budget, also nearing the bottom of the list. Unless the government addresses the factors behind such dismal performance and seriously considers the recommendations of the Health Sector Reform Commission, the much-needed change in our health sector will not come.

Reportedly, the factors identified by experts for poor ADP execution include the implementing agencies' lack of capacity, inexperienced project directors, dependence on the Public Works Department for construction, outdated budgeting methods, and leadership changes following the July uprising. In addition, government agencies often lack the necessary managerial and administrative capacity and experience to implement projects in the health sector. Many implementing agencies also lack financial autonomy, requiring them to seek the ministry's intervention, which is often a lengthy and bureaucratic process.

One crucial health project that has been delayed over the years is the one to establish fully fledged treatment centres at eight divisional headquarters for cancer, heart, and kidney patients. The project, approved in July 2019 and originally scheduled for completion by 2022, has undergone several revisions but still remains unfinished. Many other infrastructure development projects—for hospitals, medical colleges, universities, diagnostic facilities, and medical research centres—as well as the procurement of medical equipment are also facing similar delays. This means that the budget allocated for these projects remains unutilised.

While successive governments' neglect has completely crippled our health sector over the years, the situation has sadly remained the same during the interim government's tenure. We urge the government to address the issues hampering the health sector budget utilisation. The health budget must also address sector-specific needs, ensuring that adequate funds are allocated for the most-needed areas. The health sector must also have efficient leadership to ensure these projects are designed properly from the very beginning. The reform commission has put forward some pragmatic recommendations to overhaul our healthcare system, which should be implemented to make it efficient, pro-people, and accessible to all.​

 

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Unveiling the hidden truths of Bangladesh’s public health sector

The second hidden reality is the monetised cost of wastage within the public health system.

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Unveiling the hidden truths of Bangladesh’s public health sector

Budget allocations for health remain among the lowest in the region, with per capita health spending lagging behind global benchmarks. FILE VISUAL: HEALTH REFORM
Bangladesh's public health system, a lifeline for millions, is a paradox of resilience and dysfunction. The challenges are well-documented: low budget allocations, pervasive corruption, absenteeism, inadequate infrastructure, and overcrowding. These issues, coupled with systemic bottlenecks within and beyond the Ministry of Health and Family Welfare, paint a grim picture of a sector struggling to meet the needs of a growing population. Yet, beneath these known realities lie two critical unknowns that, if addressed, could transform the system's efficiency and public perception: the true value of health services provided and the monetised cost of systemic wastage. By shining a light on these hidden truths, Bangladesh can unlock the potential for meaningful reform and a healthier future.

The known struggles of the public health system

The public health sector in Bangladesh operates under severe constraints. Budget allocations for health remain among the lowest in the region, with per capita health spending lagging behind global benchmarks. Corruption erodes trust and resources, manifesting in both monetary forms—such as irregularities in procurement—and non-monetary forms, like absenteeism among healthcare providers. Infrastructure deficiencies, from poor medicine storage to inadequate diagnostic facilities, further exacerbate the system's inefficiencies. Patients endure long waits, substandard care, and limited access to essential services, while healthcare providers grapple with outdated systems and insufficient training.

Systemic hindrances amplify these challenges. The health ministry operates within a bureaucratic ecosystem where apex ministries—such as the Ministry of Public Affairs, Ministry of Finance, and Ministry of Planning—treat health no differently than other sectors, often prioritising fiscal conservatism over human lives. Within the health ministry, disparities in expertise and experience create a disconnect between secretariat-level managers, directorate-level officials, and field-level staff. Procurement processes, governed by the Public Procurement Act (PPA) and Public Procurement Rules (PPR), are riddled with ambiguities, leading to delays and inefficiencies.

The Essential Drug Company Ltd (EDCL) and Central Medical Stores Depot (CMSD) struggle with capacity constraints, undermining the supply chain for medicines. Governance issues, coupled with questions about the competence and sincerity of managers across the health ecosystem, further erode the system's effectiveness.

At the facility level, managerial inefficiencies and inadequate staffing compound these problems. The lack of the right skill mix and input mix, coupled with insufficient training, leaves facility managers and operational plan directors ill-equipped to address local challenges. The result is a public health system that, despite its critical role, fails to deliver consistent, high-quality care to those who need it most.

The value of public health services

Amid these challenges, one critical reality remains obscured: the true value of health services provided by the public sector. Neither patients, healthcare providers, nor the state have a clear understanding of this value, and this gap has profound implications.

Patients accessing public health facilities benefit from highly subsidised services, often paying nominal fees for consultations, diagnostics, or treatments. While this affordability is a cornerstone of equitable access, it obscures the actual cost and value of these services. Patients, unaware of the resources invested in their care, may undervalue the system, leading to a lack of appreciation and, in some cases, misuse of services. For example, a patient receiving a subsidised surgical procedure may not recognise the costs of skilled labour, equipment, and infrastructure that underpin it, fostering a perception that public health services are inherently low-quality or disposable.

Healthcare providers, too, lack insight into the value of their outputs. Hospitals and clinics do not systematically quantify the resources—human, financial, and material—required to deliver specific services. Without this knowledge, providers are less incentivised to address inefficiencies, such as wastage of medicines. The absence of a value-based framework also hinders accountability, as facilities cannot measure their performance against the resources they consume.

The state, meanwhile, tracks only budgetary inputs and expenditures, with little understanding of the value added by these investments. This blind spot limits the government's ability to make informed decisions about resource allocation, prioritise high-impact interventions, or advocate for increased health funding. In a country where private healthcare providers offer similar services at market rates, it is feasible to estimate the value of public health services by benchmarking against private-sector prices, adjusted for quality. By bundling services based on diagnostic-related groups and assigning quality-adjusted values, the government could illuminate the true worth of its health system. This knowledge would empower policymakers to optimise resource use, enhance accountability, and communicate the system's value to the public.

The cost of wastage

The second hidden reality is the monetised cost of wastage within the public health system. While the types of wastage—corruption, absenteeism, supply chain bottlenecks, and inefficient resource use—are widely recognised, their financial toll remains unquantified. This lack of clarity undermines efforts to address inefficiencies and allocate resources effectively.

Corruption, a pervasive issue, manifests in both monetary and non-monetary forms. Procurement irregularities, such as inflated contracts or substandard purchases, drain public funds, while absenteeism reduces the availability of skilled providers, forcing patients to seek costlier private care. Supply chain inefficiencies, including poor medicine storage and dispensing systems, lead to spoilage and stockouts, further eroding resources. The inability to control "fake" patients—individuals exploiting free medicines without medical need—adds to the burden. Additionally, the lack of an optimal input mix (e.g., equipment, staff, and supplies) and skill mix (e.g., trained personnel) results in underutilised facilities and missed opportunities for care.

Quantifying these losses is methodologically challenging but achievable. For instance, the cost of absenteeism could be estimated by calculating the salaries of absent staff and the value of forgone services. Procurement-related corruption could be assessed by comparing contract prices with market benchmarks. Supply chain wastage could be monetised by tracking spoilage rates and stockout impacts. By aggregating these costs, the government could gain a comprehensive picture of the financial toll of inefficiencies, providing a compelling case for targeted reforms.

Harnessing knowledge for reform

Unveiling these two unknowns—the value of services and the cost of wastage—could catalyse transformative change in Bangladesh's public health sector. By quantifying the value of services, the government can foster greater appreciation among patients, enhance accountability among providers, and make a stronger case for increased health funding. Public awareness campaigns could highlight the subsidies that enable affordable care, building trust and encouraging responsible use of services. Providers, armed with data on service value, could prioritise efficiency and quality, reducing wastage and improving outcomes. Policymakers, with a clearer understanding of the system's contributions, could advocate for health as a national priority, securing greater budgetary support.

Monetising wastage, meanwhile, would provide a roadmap for addressing inefficiencies. By identifying the most costly bottlenecks—whether corruption, absenteeism, or supply chain failures—the government could implement targeted interventions, such as stricter procurement oversight, digital attendance tracking, or investments in storage infrastructure. These measures, grounded in data, would maximise the impact of limited resources and restore public confidence in the system.

Bangladesh's public health sector stands at a crossroads. The challenges are daunting, but the opportunities for reform are immense. By addressing the two unknown realities—the value of services and the cost of wastage—the government can unlock the system's potential and deliver equitable, high-quality care to all citizens. This requires a commitment to transparency, rigorous data collection, and bold policy decisions. The health of a nation is its greatest asset, and Bangladesh cannot afford to let these hidden truths remain in the shadows. It is time to act, to quantify, and to transform, ensuring that every taka invested in public health delivers maximum value for the people it serves.

Dr. Syed Abdul Hamid is professor at the Institute of Health Economics, University of Dhaka and convenor of Alliance for Health Reforms Bangladesh (AHRB) and Initiator of Network for Healthcare Excellence (NHE).​