Evaluation of the effect of Decentralization on Equity in the Health Sector Financial Resource allocation process in Zambia

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Muloshi, K.M.
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The research contained in this document was done in order to identify the factors considered in the formula used for allocating financial resources in the Zambian health sector since implementation of the decentralization policy. The identified parameters were then compared to those obtained from the international literature review such as the demographics of a population, morbidity/mortality profiles and socio-economic status of people in different geographical areas. Data were collected from interviews with relevant informants, questionnaires and review of key policy documents and reports. Information was gathered from the Central Board of Health and from some District Health Boards. It included data on currently used variables in the formula and their justification; sources of district own revenue, actual amounts raised, factors affecting local revenue generation; socio-economic indicators and demographic profiles.Analysis was done on the basis of assessing how (in)equitable the current formula is. Both qualitative and quantitative data were used. The former were analysed manually while the latter were analysed with computer software Excel and STATA. Major findings include: >The current formula does not allow for equitable distribution of financial resources. Inequities were found between provinces, with urban ones getting more funds than their rural counterparts. >Indicators of need incorporated in the current formula were found to be inadequate. There is need to include more such as utilization of health services by age and sex and socio-economic status of people in a particular location. >The current formula also uses some unstable and arbitrary parameters like cholera proneness and population density, respectively. Such variables need to be modified to improve equity. >Local revenue from user fees and prepayment schemes is not considered in the formula. It was found that there are variations around the country in terms of revenue generation, with urban areas raising more funds than the rural ones. The study thus recommends that consideration be made of resources mobilized within the districts in the resource allocation formula. This study concludes by drawing up several policy change recommendations that would enhance equity based on the findings above.