Technical assistance to the Nepal Health Sector Support Programme

The Nepal Health Sector Support Programme (NHSSP) is one of our key programmes where we have provided technical assistance, over more than a decade, in the following three phases:

Nepal Health Sector Support Programme II (January 2011 - July 2015): during this phase, technical assistance focused on strengthening Nepal’s health system by building sustainable local capacity to deliver essential services and improving leadership and governance. It also included improving aid effectiveness to the health sector.

Health System Transition Recovery Programme (August 2015 - March 2017): in this phase technical assitance was aimed at multi-sector earthquake response. The DFID provided additional financial support to MoHP to implement ‘Transition and Recovery of Nepal’s Health System in Post-earthquake Situation'. This phase built on financial aid and technical assistance support to NHSSP II.

Nepal Health Sector Support Programme III (April 2017- December 2023): this phase is designed to support the objectives of the National Health Sector Strategy (NHSS) and is focused on enhancing the MoHP's capability to develop a resilient health system to deliver high-quality healthcare services while leaving no one behind. It continues to do this through improved leadership and governance and aid effectiveness to the health sector. The ongoing phase had different focus areas over its life span in response to the emerging priorities.

Between April 2017 and March 2020, NHSSP III supported the MoHP with the post-earthquake context and transition to federalism. From April 2020, NHSSP III was reshaped to extend its assistance to the sub-national government supporting health sector devolution at all three spheres of government. Technical assistance to three provincial governments (Madhesh, Lumbini, and Sudurpashcim) and 38 local level governments focused on strengthening sub-national health system by enabling them to better plan, budget, manage and deliver equitable health care. Similarly, timely technical assistance during the Covid-19 focused on improving MoHP readiness to respond to the pandemic. The project has five thematic areas: leadership and governance, coverage and quality, data for decision making, health infrastructure, and gender equity and social inclusion.

Overview

From September 2010 to December 2022, we oversaw the health financing and public financial management component of the programme. Procurement was added in the subsequent phase of the programme in 2017. In its final form, we led the leadership and governance thematic area.

We provided technical assistance to build an enabling environment for reforms and anchoring work to the policy cycle. We supported in the development of policies, strategies, strategic framework and guidelines that could facilitate in institutionalising reform initiatives. The team is strengthening capacity of the Human Resource and Financial Management Division, MoHP to prepare electronic Annual Work Plans and Budgets, improving budget and expenditure tracking through the development of Financial Monitoring Information System and enhancing internal control. Our engagement with MoHP is in improving the overall financial management through the public financial management improvement plan and the internal audit improvement plan. Similarly, we were overseeing implementation of output based budgeting such as the performance-based grant agreement with a view to stimulating higher performance levels in the health sector, particularly in autonomous hospitals which use government funding as grants. We institutionalised the process of production of health sector budget analysis at the federal, province, and local levels.

Over a decade, we were responsible to track financial aid channelled by pooled partners under the sector wide approach through the production of Financial Monitoring Reports. In 2012, we were sole contracted by DFID to design the Transaction Accounting and Budgeting Control System (TABUCS) to undertake planning and monitor budgeting and expenditure from the health sector. The concept and key features from TABUCS were later used to develop the Sub-national Government Treasury Regulatory Application System.

Our support at the Department of Health Services, Logistics Management Division focused on enhancing procurement functions, and improving system efficiency achieved through procurement improvement plan. We also had a key role in managing the FCDO's flagship Aama programme which is now completely integrated into the system and funded through public resources.  We led the design of several surveys to track the impact of intervention such as the health facility surveys, household surveys, rapid assessments, and assessment of basic health service delivery post earthquake and during Covid-19, costing studies and social auditing are also underway together with a review of demand side financing schemes.

To facilitate smooth transition to federalism, we continue to provide the MoHP with a responsive, flexible and timely technical support specially to re-evaluate institutional structures and in unbundling the health roles and responsibilities of three spheres of government. The Public Financial Management Strategic Framework and Public Procurement Strategic Framework provide guidance to improve both procurement and public financial management at the sub-national level. At the local level, our health system strengthening officers provided support to develop necessary policy and act related to health, conduct evidence-based planning, ensure health services are delivered from facilities adhering to the minimum standard, improving recording and reporting and strengthening monitoring including tracking of health sector budget and expenditure. Additionally, we assisted in capacity building of health officers who were service providers to better equip them on their management roles and responsibilities through training, knowledge and skill transfer.

During Covid-19, we supported the MoHP by undertaking an epidemiological modelling and provided daily forecast on number of infected cases. The information was useful in planning, budgeting and resource mobilisation. Together with MoHP, we were closely steering  the Incident Command System from developing implementing and monitoring all aspects of the response plan. Our costing of the Covid-19 treatment plan (mild, moderate, and severe cases) was utilised by the government to procure services from the public and private to provide free service to citizens.  We also helped MoHP in developing an emergency procurement decree and emergency technical specific bank for Covid-19 equipment and supplies to facilitate uniformity and efficiency in procurement at all levels.

Over the entire span of the NHSSP project period, there were several reform initiatives in the health sector. Health sector has been suffering from inefficient use of resources, especially in public procurement and weak public financial management. In the meantime, Nepal had undergone federalisation. The transition phase brought many confusions in the intergovernmental relations, functions and functionaries, organisational and legal structures, and financial and human resource management. During this transition period, the fiduciary risk was high in the health sector.  

We provided technical support for MoHP to develop necessary policies, strategies and guidelines and health sector functional analyses to overcome these challenges. Some improvements in public financial management (PFM) are emerging at MoHP. The ministry approved Public Financial Management Strategic Framework, which incorporates PFM reforms at the federal level with specific outputs, objectives, activities, and interventions. The transfer of responsibilities in procuring medicines under basic health services to provinces and local levels also created several issues and challenges.

To address these challenges, NHSSP supported the ministry to develop procurement improvement plan (PIP, 2017-2022), which was revised as a Public Procurement Strategic Framework for Management of Medicines and Medical Goods and endorsed in 2022. These frameworks are taken as referral documents for sub-national governments to frame PFM reforms in their jurisdictions. Following these strategic frameworks, provincial health ministries, with our technical support, developed and endorsed their respective procurement improvement plans and financial improvement plans to reduce fiduciary risk and increase budget credibility. Another challenge is low absorptive capacity of provincial and local governments in utilisation of available resources in the health sector. Health sector budget analysis clearly flagged the issues and challenges to be addressed for improved budget absorption.

Challenges

NHSSP is a true example of a health system resilience project. It aimed to improve and strengthen health service delivery amid chronic stress but also contributed to managing shocks. Political instability and frequent changes in leadership inhibited project delivery.  The project activities were affected by the Gorkha earthquake of April 2015, that demanded emergency response, transition and recovery. In 2017, the transition to federalism from unitary system of governance to three spheres of government and decentralisation of health sector added another level of challenge. This was mainly because country was dealing with both the administrative and structural reform and ambiguity around roles and responsibilities across governments. Moreover, Covid-19 pandemic changed the course of action of the project: most of the technical assistance work were transactional in nature; focussed efforts on specific areas of health governance also suffered.

Our approach

The technical assistance utilised a capacity enhancement approach at the organisation, systems, and people level.

Organisation: assisted institutions and organisations in developing their capacity to deliver the NHSS by organisational analysis and restructuring of management and administrative structures.

Systems: enhancing capability to deliver on NHSS by developing new tools, improving and updating existing tools and information that make systems effective; improving and establishing processes that increase capacity to deliver, such as planning and budgeting, financial management, supply chain systems, and procurement, and building institutional capacity at the local level.

People: supporting skills enhancement of key people to do their jobs through on-the-job supportive supervision, coaching, and mentoring with subsequent competency-based workplace assessments, needs-based training, and demonstrating good practices.


NHSSP evolved being adaptive technical support including being flexible over the years  through a Technical Assistance Response Fund and for enhanced collaborative working with other external development partners in Nepal’s health sector.

Outcomes

We provided technical support for crafting policies, strategic frameworks (public procurement and financial management), guidelines, training manuals (PFM and budget analysis), established IT based financial information management system, FMR reporting mechanism, establishment of technical specification bank, development of electronic Consolidated Annual Procurement Plan (e-CAPP) and web-based grievances handling and redressal mechanism in procurement. These system strengthening initiatives ultimately contributed to better outcomes for the ministry.

Key outcomes: improved budget utilisation, reduction in audit observations, increase in audit clearance, policy harmonisation and streamlining across all spheres of government, improved efficiency in public procurement and financial management, channelised financial aid of development partners, institutionalisation of the Aama programme, and increased institutional delivery.