DESK REVIEWS | 02.02.04. Public funding

DESK REVIEW | 02.02.04. Public funding

Brazil is undergoing a socio-political and economic transition. Since 2018, Brazil is under a new government, which has been adopting austerity measures that are likely to affect the SUS. Some estimates show impacts that might be linked to these measures on healthcare of the population, such as: increased infant mortality, worsened regional disparity regarding infant mortality, increased inequalities regarding the Family Health Strategy (FHS) coverage and among mothers who regularly attend antenatal care centres. Changes in FHS coverage are likely to affect smaller municipalities disproportionately, given the stronger dependence of small municipalities on primary healthcare (Castro et al., 2019). So far, no comprehensive plan for the future exists. While the Constitutional Amendment Proposal Number 241 (PEC 241), approved in 2016, limits public expenditures and consequently affects the SUS, the Ministry of Health has strengthened the Primary Healthcare by expanding the number of working hours and the quantity of primary healthcare units. However, it is still too early to assess possible changes in the financing of the health system.


Castro, M. C., Massuda, A., Almeida, G., Menezes-Filho, N. A., Andrade, M. V., Noronha, K. V. M. de S., Rocha, R., Macinko, J., Hone, T., Tasca, R., Giovanella, L., Malik, A. M., Werneck, H., Fachine, L. A., & Rifat, A. (2019). Brazil’s unified health system: The first 30 years and prospects for the future. Lancet Health Public.

India has a semi-federal governance structure. Public responsibilities are shared either by the Union or the States or both. Health is a State subject in India. Thus, Union and State strategies for health might align, differ, or co-adapt. Government spending on health is mainly based on budget allocations as part of the annually announced Union (Central) budget as well as state budget allocations and central transfers to states.

A scheme launched by the Government of India in 2018 is the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY), which is part of the Ayushman Bharat programme. This scheme is designed to have a defined benefit cover of Rs. 5 lakh per family per year (National Health Portal, 2019). Benefits of the scheme are portable across the country and a beneficiary covered under the scheme will be allowed to take cashless benefits from any public/private impanelled hospitals across the country (National Health Portal, 2019). It is an entitlement-based scheme with entitlement decided based on deprivation criteria in the Socio-Economic Caste Census database (National Health Portal, 2019).

The Ayushman Bharat flagship programme brings together initiatives of the National Health Insurance (PMJAY) and the Health and Wellness Centres (HWCs) (National Health Portal, 2019). The programme is based on tax-based financing and thus, critically depends on the Centre’s allocations to the programme.


National Health Portal. (2019). Ayushman Bharat Yojana. Government of India. Available from:

Yes. The Ministry of Health in Indonesia pursues a five-step Strategic Plan (2015-2019). The key aspects on the agenda are the ‘revitalization of community health centres (puskesmas)’, continuation of care, and ‘specific solutions for specific health problems’. Planned changes to the financing strategy have only been outlined for community health centres. The Ministry of Health declared the aim to ‘increase […] the budget for facilities and support for puskesmas’ but it did not explicitly outline how this will be approached (Claramita et al., 2017, p.9). The Ministry of Health further states the aim to reduce ‘household burden [due] to finance health services’ from 37 per cent to 10 per cent (Ministry of Health Republic of Indonesia, 2015a, p.45).


Claramita, M., Syah, N. A., Ekawati, F. M., Hilman, O., & Kusnanto, H. (2017). Primary Health Care Systems (PRIMASYS): Comprehensive case study from Indonesia. World Health Organization.

Ministry of Health Republic of Indonesia. (2015a). Ministry of Health Regulation No. 67/2015 on Geriatric Services in Public Health Center (Permenkes No. 67/2015 Tentang Penyelenggaraan Pelayanan Kesehatan Lanjut Usia Di Pusat Kesehatan Masyarakat). Kementrian Kesehatan Indonesia, 1–140.

The new initiative for the country is to move towards universal coverage (funded by the World Bank). A pilot has been rolled out in 4 counties (described under It is planned to roll out cover for all households by 2022 to guarantee access to equitable, affordable, and high-quality health and related services for all citizens. Other financing strategies by the government in addition to the UHC are through taxation and health insurance contributions (to cover basic essential services). The contributions are discussed in 1.04.01 under social protection schemes. General tax revenue is 30% of value added tax which is charged at 16%. Import and excise duty each account for 10% of the total revenue while corporate tax for companies ranges between 20% and 37.5% depending on the company’s existence. A proportion of the taxes are allocated to health care in Kenya (Chuma & Okungu, 2011). These financing mechanisms translate direct household payments into prepayment so that OOP are kept at a minimum (Njuguna & Pepela, 2019).


Chuma, J., & Okungu, V. (2011). Viewing the Kenyan health system through an equity lens: implications for universal coverage. International Journal for Equity in Health, 10(1), 22.

Njuguna, D., & Pepela, W. (2019). A Case for Increasing Public Investments in Health: Raising Public Commitments to Kenya’s Health Sector. Nairobi, Kenya.

One of the main campaign promises was to end the fragmented nature of the health system and work towards a single universal health system. As of January 2020, the government eliminated the 2003 health reform (Seguro Popular) from national laws and government agencies with the objective of generating a sole, centralised health system with integrated public financing and delivery, while reducing private participation. To this end, President Lopez Obrador (referred to by his initials, AMLO) created the Institute of Health and Wellbeing, INSABI (Instituto de Salud para el Bienestar), but to date (July 2020), no real changes have been implemented. A first study of the proposed reform notes large challenges, many that should have been overseen before implementation, and summarises their findings in five lessons: First, undoing past reforms is much easier than implementing a new system. Second, the AMLO government’s restructuring emerged more from broad ethical principles than detailed technical analyses, with limited plans for evaluation. Third, the overarching values of the AMLO government reflect a pro-statist and anti-market bias, swimming against the global flow of health policy trends to include the private sector in reforming health systems. Fourth, the experiences in Mexico show that path dependence does not always work as expected in policy reform. Finally, the debate of Seguro Popular versus INSABI shows the influence of personality politics and polarization” (Reich, 2020).


Reich, M. R. (2020). Restructuring Health Reform, Mexican Style. Health Systems & Reform, 6(1), e1763114.

The Ministry of Planning (Ministério do Planejamento, in Portuguese) (International Budget Partnership, 2018).


International Budget Partnership. (2018). Defining and managing budget programs in the Health Sector: The Brazilian Experience.


The federal structure of the country and the recognition of health as a state subject implies that both centre and the states decide how much should be spent on health. States depend on central funds for many of the health programmes. While most of the taxation powers are with the central government (for example income tax), the bulk of spending on health is done by the states. Thus, transfer of resources from the central government to the states is a critical part of the overall financing arrangement, and the Finance Commission – set up every 5 years to indicate principles of allocation of divisible taxes as well as the share between central government and the states – is a key entity that recommends how much additional funds should be allocated to the states and how these should be distributed across states. However, recommendations of the Finance Commission are not binding for the central government (Finance Commission India, n.d.; MoHFW, 2017).


Finance Commission India. (n.d.). Finance Commission. Government of India. Available from:

Ministry of Health and Family Welfare. (2017). National Health Policy. Government of India. Available from:

The World Bank suggests that health care spending has been ‘accorded a generally low priority’ in Indonesia given that expenditure of total government budget amounted only to 4.7 per cent, which is lower than that of neighbouring countries such as the Philippines, China, and Thailand (World Bank, 2016b, p.4). In 2015, the Government of Indonesia passed legislation that requires 5 per cent of the national budget to be allocated to the health sector. This target was reached by 2016. In addition, district governments must spend 10 per cent of their budget on health-related issues (Agustina et al., 2019, p.85). Despite these allocations, spending on health in Indonesia is comparatively low (3% of GDP) in comparison to other LMICs and other countries in the Association of Southeast Asian Nations (Agustina et al., 2019, p.85).

In an effort to provide communities with greater ability to respond to local needs, the Village Law (Law Number 6/2014) and a law to strengthen the role of provinces (Law Number 23/2014) have been enacted.  The Village Law regulates the transfer of an estimated one billion rupiahs per village to 77,548 villages. These funds may also contribute to improvement of community-based healthcare and lifestyle interventions. The law strengthening the role of the provinces creates a closer link between provincial governors and central governments and offers an opportunity for provinces to be responsible for monitoring Minimum Service Standards in health care. Besides monitoring activities, provinces can impose sanctions on district/city level to enforce adherence to Minimum Service Standards (Ministry of Health Republic of Indonesia, 2015b, p.36).


Agustina, R., Dartanto, T., Sitompul, R., Susiloretni, K. A., Suparmi, Achadi, E. L., Taher, A., Wirawan, F., Sungkar, S., Sudarmono, P., Shankar, A. H., Thabrany, H., Susiloretni, K. A., Soewondo, P., Ahmad, S. A., Kurniawan, M., Hidayat, B., Pardede, D., Mundiharno, … Khusun, H. (2019). Universal health coverage in Indonesia: concept, progress, and challenges. The Lancet, 393(10166), 75–102.

Ministry of Health Republic of Indonesia. (2015b). National Strategy: Management of Alzheimer and Other Dementia Diseases: Towards Healthy and Productive Older Persons. Ministry of Health Republic of Indonesia.

The President of the Republic of Indonesia. (2014). Law of the Republic of Indonesia Number 6 of 2014 concerning village

The President of the Republic of Indonesia. (2014). Law of the Republic of Indonesia Number 23 of 2014 about local government

World Bank. (2016b). Indonesia Health Financing System assessment: spend more, spend right & spend better. Available at:


The national government is funded through various channels and allocates specific proportions to each Ministry. The Ministry of Finance sets 3-year budget ceilings for each sector rather than each sector submitting a budget request based on actual needs. The Ministry of Health (MoH) then distributes the funds through the county Health Management Boards in each county (Nyakundi et al., 2011).


Nyakundi, C. K., Teti, C., Akimala, H., Njoya, E., Brucker, M., Nderitu, R., & Changwony, J. (2011). Health Financing in Kenya: The case of RH/FP. Nairobi, Kenya.

The Ministry of Finance (Secretaria de Hacienda y Credito Publico) is in charge of presenting the Federal Public Budget to the legislative branch for its review and approval.

The Constitution of 1988 defines the key planning and budgeting instruments as: (a) the Pluriannual Plan (Plano Plurianual – PPA), which is formulated over the first year of a presidential mandate and covers a period of 4 years; (b) the Law of Budgetary Guidelines (Lei de Diretrizes Orçamentárias – LDO) to be passed every year to define the key parameters and policy directives that will orient budget formulation; and (c) the annual Budget Law (Lei Orçamentária Anual – LOA). The PPA is meant to define objectives and targets for national, regional, and sectoral government plans and programs, while LDOs and LOAs are supposed to translate these into yearly priorities and activities. The Ministry of Planning reviews and updates the budget for health as part of the process for formulating the PPA. At the beginning of each PPA cycle, the ministry of planning defines the programs that outline the government’s agenda for each area of public policy, including health policies (International Budget Partnership, 2018). 


International Budget Partnership. (2018). Defining and managing budget programs in the Health Sector: The Brazilian Experience.


The central government presents its budget estimates for each of the sectors, including the health sector, in its Annual Financial Statement (traditionally in February) – also called the Union Budget of India. The budget is prepared mainly in the Ministry of Finance after detailed consultations with major stakeholders, including other ministries. Thus, the Ministry of Health and Family Welfare’s inputs are critical. However, the National Institute for Transforming India (NITI) Aayog (the policy think tank of the government, which provides technical advice to both central and state governments), which replaced the former Planning Commission, also plays an important role especially in terms of new initiatives and can influence the budget, including the health budget (Government of India, 2018a).


Government of India. (2018a). NITI Aayog holds Dialogue on Health System for New India. Available from:

Every five years, the Ministry of National Development Planning (BAPPENAS) issues a medium-term national spending plan (Rencana Pengeluaran Jangka Menengah Nasional (RPJMN)). Based on this and taking into consideration the macroeconomic framework as well as the president’s instructions, the ministries, including the Ministry of Health have to submit an annual work plan (Rencana Kerja Pemerintah (RKP)), along with their budget to the Ministry of Finance. The combined budgets are then discussed and approved by the legislative body (Dewan Perwakilan Rakyat (DPR)). This process occurs annually between October and November for the following year (Kementrian Keuangan, 2015).

The previous RPJMN covered the years 2014 to 2019. From 2020 onwards the RPJMN 2020-2024 will be the reference for upcoming budgets (Kementrian PPN/BAPPENAS, 2019).


Kementrian Keuangan. (2015). Pedoman Proses Perencanaan, Penganggaran, dan Pelaksanaan APBN. pedoman perencanaan.pdf

Kementrian PPN/BAPPENAS. (2019). Rancangan Teknokratik Rencana Pembangunan Jangka Menengah Nasional 2020 – 2024.

Half of the total national health budget is allocated to three referral hospitals while resource allocation to the 47 counties is provided in block grants and is based on a resource allocation formula that takes into consideration factors such as the population, poverty levels, land share etc. The counties then decide the amount to be allocated to health. (Health Policy Project, 2016). Although the proportion of total government budget allocation to health (national and county) has increased over the past few years (7% in Financial Years (FYs) 2017/18 to 9.2% in FYs 2018/19) (Ministry of Health, 2018), it is still below the Abuja Declaration level of 15% .

During the financial year 2014/15, 38 of the 47 counties allocated at least 15% of the total county budget to health, with a larger share of the health budget given to conditions with a high burden (Health Policy Project, 2016). These allocations increased from 27% in FY 2016/17 27.2% in FY 2017/18 which is still below the pre-devolution level of 35% (Health Policy Plus, 2019). In Kenya, the financial year begins on 1st July of the present calendar year and ends on 30thth June of the following year. The budget making process in each county is a cycle (each cycle contains four financial quarters of three months each) with four quarters as follows (Githinji, 2019):

  • First Quarter (1st July to 30th September): Each county treasury to issue every county department and the public with a circular on the budget process guidelines for the following financial year
  • Second Quarter (1st October to 31st December): The county treasury tables the county budget reviews before the county assembly and the county governments to publish first quarter implementation reports.
  • Third Quarter (1st January to 31st March): The county governments publicize and publish second quarter implementation reports. The county treasury tables, publishes, and publicizes the County Fiscal Strategy Paper for approval by the county assembly.
  • Fourth Quarter (1st April to 30th June): The county governments publicize and publish third quarter implementation reports and the county treasury submits the budget estimates to the county assembly who will pass the appropriation bill.

Githinji, G. (2019). The County government budget process in Kenya.

Health Policy Plus. (2019). Kenya’s Health Sector Budget An Analysis of National and County Accounts for Fiscal Year 2018/19. Washington DC.

Health Policy Project. (2016). Health Financing Profile: Kenya. Washington DC.

Ministry of Health. (2018). National and county health budget analysis FY 2018/19. Nairobi, Kenya.

While each sub-system has a particular process for planning and allocating funds, as with all policies and programmes financed with public funds, the budget process starts in June with the elaboration of the Annual Operation Programmes (Programa Operativo Annual, POA). These plans are presented by sector or Ministry to the Ministry of Finance, which makes the ultimate decisions on how funds are allocated. This gets integrated into the Federal Budget (Presupuesto de Egresos de la Federación, PEF) initiative that then goes to Congress for final approval. According to the Budget and Expenditure Legislation, the Federal Budget initiative has to be submitted no later than September 8 of each year to the Chamber of Deputies, which has the exclusive power to approve it no later than November 15 and then be published in the Official Gazette of the Federation no later than 20 calendar days after its approval (Ley Federal de Presupuesto y Responsabilidad Hacendaria).

The budget to be spent on health follows a “transfer system” and priorities are set independently by each of the different government levels (federal government, states and municipalities) (Brazilian Ministry of Health, 2019m).


Brazilian Ministry of Health. (2019m). Sobre o FNS.


The previous description clearly indicates that priority setting itself is a complex exercise and depends on the central government, the states, and also on the NITI Aayog. There are programmes that are centrally sponsored, but responsibility for implementation lies with the states. The states also set their priorities and implement several programmes where the Centre does not play any role. However, since the states depend on the central budget allocation for much of their funding, ultimately, the total amount of funding for the health sector –which comes from the states’ own revenues and central transfers – does affect how the priorities get implemented.

The priorities for funding are set by the Ministry of Health based on the RPJMN as mentioned above. For the RPJMN 2020-2024, one of the directions of policy and strategy is to increase access and quality of health service and to work towards universal health coverage with an emphasis on the strengthening of primary care. This was to be achieved through several action plans, including those focusing on disease control for HIV/AIDS, Tuberculosis, malaria, heart disease, stroke, hypertension, diabetes, cancer, emerging diseases, diseases with outbreak potential, overlooked tropical disease (lepra, filariasis, schistosomiasis), mental health, injury, vision problems, and mouth and dental problems. Dementia and ageing were not mentioned in this document; however, they might be seen as part of the wider mental health agenda (Kementrian PPN/BAPPENAS, 2019).

The Government of Indonesia prioritised funding of health insurance for low-income and vulnerable income groups as well as for the strengthening of primary care (Puskesmas) and the enhancing of specific programmes, such as maternal and child health and family planning (Agustina et al., 2019, p.90; Mahendradhata et al., 2017, p.241).


Agustina, R., Dartanto, T., Sitompul, R., Susiloretni, K. A., Suparmi, Achadi, E. L., Taher, A., Wirawan, F., Sungkar, S., Sudarmono, P., Shankar, A. H., Thabrany, H., Susiloretni, K. A., Soewondo, P., Ahmad, S. A., Kurniawan, M., Hidayat, B., Pardede, D., Mundiharno, … Khusun, H. (2019). Universal health coverage in Indonesia: concept, progress, and challenges. The Lancet, 393(10166), 75–102.

Kementrian PPN/BAPPENAS. (2019). Rancangan Teknokratik Rencana Pembangunan Jangka Menengah Nasional 2020 – 2024.

Mahendradhata, Y., Trisnantoro, L., Listyadewi, S., Soewondo, P., MArthias, T., Harimurti, P., & Prawira, J. (2017). The Republic of Indonesia Health System Review (Vol. 7, Issue 1).

The sector working groups organized within the context of UN-classification of the functions of the government (COFOG) are responsible for formulation and prioritization of sector budget proposals. Within the health sector, the sector working group representatives are from the ministry of health and comprise of (Republic of Kenya, 2018a) page 15:

  • “A chairperson accounting officer mutually selected by other accounting officers”
  • “Sector governor appointed by the national treasury”
  • “Sector governor appointed by State department for planning”
  • “Technical working group appointed by the sector working group”
  • “Sector working group secretariat appointed by the accounting officers to coordinate the activities of the sector”
  • “Representatives from development partners”
  • “Representatives from the private sector”

Republic of Kenya. (2018a). Guidelines for the preparation of the medium-term budget for the period 2019/20 -2021/22. Nairobi, Kenya.

Each institution sets their priorities. Financing is negotiated with the Ministry of Finance.