Working in Health: Financing and Managing the Public Sector Health Workforce Chapter 3 – Background Country Study for Zambia Marko Vujicic, Kelechi Ohiri,

Working in Health:

Financing and Managing the Public Sector Health Workforce

Working in Health:

Financing and Managing the Public Sector Health Workforce

Chapter 3 – Background Country Study for Zambia

Marko Vujicic, Kelechi Ohiri, Susan Sparkes with Tim Martineau

The World Bank, Washington, DC

Outline Country macroeconomic and fiscal

context Impact of government wage bill policy

on the health workforce• Wage bill budgeting process• Budget for overall wage bill• Budget for health sector wage bill• Impact on staffing

Human resource management policies and practices in the health sector

• Creating funded posts• Recruiting health workers• Tenure (types of contracts)• Paying health workers • Promotions and sanctions

Key Messages

Macroeconomic and Fiscal Context

1995: Decentralization through the establishment of Central Board of Health (CBOH), hospital management boards and district health boards

• Ministry of Health (MoH) responsible for formulation of health policy, legislation, donor coordination, and monitoring of health status and services.

• Central Board of Health responsible for coordination and regulation of health boards at district level.

• District health boards responsible for health service delivery.• Intent was to keep skeleton staff in MOH and to de-link all health workers so that

they are employed by health boards and directly by the government.

2006: Health boards abolished due in part to:• Poor coordination in implementing reforms;• Clinical staff were never de-linked. Only managerial and support staff.• Failure to de-link health workers due in part to resistance from unions• Fiscal constraints after de-linking

• operating budgets increasingly consumed by allowances paid to staff• All staff now being re-absorbed into the central payroll

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Impact of Government Wage Bill Policy on the Health Workforce

Wage bill budgeting process

1. Ministry of Finance and National Planning (MoFNP) determines overall government wage bill.

2. MoH submits illustrative budget to MoFNP based on MTEF guidelines.

3. MOFNP allocates wage bill for sectors.

4. Negotiations take place between MoFNP and MoH.

5. Final budget determined by MoFNP.

• The MoH developed an HRH strategy in 2005. Scaling up plans are based on WHO recommendations for staff-to-population ratios.

• Approved establishment increased from 23,176 positions to 49,360 to meet norms.

• Fiscal year begins in January but the wage bill budget is not approved until March.

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Budget for overall wage bill

2000: Wage bill begins to expand rapidly. 2002: Pay reform introduced. Number of

salary grades reduced and salaries decompressed. But allowances were not consolidated due to union opposition. Led to large budget overruns

2002: 47% of government revenue being used to pay civil servants. Hiring freeze introduced but doctors and nurses explicitly excluded

2004: IMF Staff Monitored Program put into place; Government of Zambia aims to limit the public sector wage bill. Again, wage bill targets took into account planned hiring in the health and education sector

2006 : Wage bill remains relatively constant and just below the 8 percent of GDP target set by the IMF and Government of Zambia.

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Budget for health sector wage bill

1994 - 2000: Health sector received increasing share of overall wage bill.

2001: Spike in health wage bill as share of overall wage bill. This was due in part to re-integration of staff from district health boards back onto the MoH wage bill. Not due to large scale increases in hiring or salaries.

2002 – 2007: Health wage bill kept relatively constant at about 10% of government overall public sector wage bill.

Not possible to infer whether the health sector was prioritized within the overall wage bill budgeting process. This is due to de-linkage and re-linkage associated with the district boards of health during the period.

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Budget for health sector wage bill

Health Spending 1990s: Steady upward trend of health

expenditure as share of government expenditure

2000: declining trend of health expenditure as share of government expenditure

Government is committed to reaching Abuja Target of 15% of total government expenditure .

Wages as % of Health Spending 1994 – 1999: Health wage bill as share of

health expenditure remains relatively constant.

2001: Wage bill begins consuming more and more health expenditure. This is due to decompressed salary scale and re-integration of health workers back into the civil service.

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Impact on staffing

Hiring Trends 1999 – 2001: increased levels of hiring. But

unclear what share is truly ‘new’ staff vs. staff being re-linked to the MoH payroll (i.e. staff previously employed by district boards).

No reliable information on number of health workers over time so staffing levels can not be tracked

Hiring projected to remain constant according to latest MTEF

Budget Execution Health wage bill execution rates are very low

• 2006: 50%• 2007: 70%

No evidence of health worker unemployment in Zambia so could be the case that staff are simply not there. Or, could also be due to inefficiencies in recruitment process.

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Human Resource Management Policies and Practices in the

Health Sector

Context 1995: National Health Services Act

• Creation of boards of health system• Key management responsibilities decentralized to districts• MoH management staff reduced from 220 to 90• Intent was to de-link all health workers from civil service so they are employed by

district boards

1995 – 2006: Challenges to Implementation• Health workers were never de-linked. They were instead seconded to health

boards, but still part of the civil service and paid out of the health wage bill.• Led to unclear terms of service• Increasing share of district board budgets went towards hiring support staff and

paying allowances to all staff. Crowded out non-wage spending.

2006: Health board abolished• Health workers absorbed back into the civil service.

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Creating funded posts

In 2006, an Establishment of 51,414 was endorsed• Based on WHO staff-to-population norms of 2.3 health workers per 1,000

population.• Not all of these positions are funded

Each year, additional posts become funded. The number is based on the annual wage bill negotiation process between MoFNP, MoH and PSMD.

Final approval of funded posts rests in large part outside of the purview of the MoH.

The process has long delays with many actors involved The approval process for newly vacated posts (i.e. retirement) and newly

created posts is the same Currently there are 30,833 staff in post

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Recruiting health workers

Recruitment process is centralized with many actors and subject to delays. Job advertisements do not specify the geographic location or type of facility

where a vacancy is located. Health workers apply to the MoH and are recruited into a single pool and

then assigned to posts once they are hired. In 2007, only 1,400 out of 1700 newly funded positions were filled – i.e. 18%

of approved budget for new recruits was not spent. Recruitment process also contributes to geographic imbalances.

• In Lusaka, the doctor-to-population ratio is 1:6,247.• In Northern Province, the doctor-to-population ratio is 1:65,763.

Recruiting for particular locations is known to improve retention in rural areas

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Tenure

Most health workers are now permanent, pensionable and part of the overall civil service.

Other types of employees include:• Contract staff members• Casual employees• Expatriate workers

Breakdown by different contract types is not available Shift to permanent contracts has likely reduced the incentive for overall staff

performance • Managers no longer have authority to hire or dismiss health workers.• Managers do not have control over selection of candidates and speed of process

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Remuneration

Health workers and medical doctors are paid on salary scales (Medical Salary Scale and Medical Doctor Salary Scale) that are different from other civil servants (General Salary Scale).

• Health worker salaries can be adjusted without spillovers

Allowances make up significant proportion of overall earnings.• 39% of a doctor’s total remuneration• 21% of a lab technician’s total remuneration

Allowances include subsistence allowance, uniform upkeep, transport and baggage repatriation, settling, rural and hardship allowances, recruitment and retention allowances, and on-call allowance.

Allowances are not counted as part of the health wage bill. Health workers earn more in the private sector

• Doctors earn 3.0 X government salary• Midwives earn 1.3 X government salary

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Promotion and Sanctioning

Promotion• Depends on availability of a vacancy

• someone must retire, resign, or a new post must be created • Promotion approval has to go from supervisor of health facility to MoH to PSMD

to PSC. Notification has to pass through the same channels to reach the supervisor of the health facility before a health worker can be officially promoted.

Termination• May occur at any time by giving the officer three months’ salary in lieu of notice.• In 2006, 8% of all staff members who left health facilities were dismissed or

suspended.

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

Key Messages The health sector was explicitly exempted from the overall public sector

hiring freeze but it is not clear whether this happened in practice. Remuneration paid to health workers is not always captured under the

personnel emoluments line item of the budget. The de-linkage of health workers from the civil service was never fully carried

out. Weak capacity, union pressure and poor overall planning were major factors.

The MOH has not always fully executed its wage bill budget due to recruitment bottlenecks and lack of health workers available to hire.

The highly centralized nature of hiring processes creates delays and leads to unresponsiveness. Decentralization of the recruitment process should be explored.

Recruitment and retention allowances could be used more strategically to reward those working in underserved areas.

Overall, the evidence suggests that the major constraints to improving health workforce performance are not fiscal but managerial.

Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.