Financing and Managing the Health Workforce in the Public SectorFFinancing and Managing the Health inancing and Managing the Health Workforce in the Public SectorWorkforce in the Public Sector

Marko Vujicic and Susan Sparkes

The World Bank

Geneva, Switzerland

October 21, 2008

Outline of Presentation

What staffing levels are fiscally sustainable in the public sector?

What are training costs to staff up to these levels?

Would all migrants be able to find jobs if they did not migrate?

What are the major fiscal and managerial bottlenecks to scaling up staffing?

• Wage bill policies • Management policies and practices

What staffing levels are fiscally sustainable in the public sector?

Total Economically Sustainable Staffing Levels

0Average HE 1996-2005

Average growth 1996-2005

Projection of past trends

6015%5Best case

0-5% change-5Worst case

Insurance Effect (as % of Out-of-Pocket Spending)

Public Health Expenditures as % of Gov. Expenditures by 2015 (%)

Annual Economic Growth (%)

Scenario

HRH scenariosHealth spending scenarios

Most expensive smallest number of staff

20% wage increase

Least expensive largest number of staff

No wage change

Shift to highs skills mix

No skills mix change

Shift to low skill mix Scenario

See: A. Preker, M. Vujicic, Y. Dukhan, C. Ly, H. Beciu, and P.N. Materu, “Scaling up Health Professional Education: Opportunities and Challenges for Africa, The World Bank, DRAFT, January 2008.

Total Economically Sustainable Staffing Levels

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

No wagechange, no

skill mixchange

25% wageincrease, no

skill mixchange

No wagechange, skillmix shif ts to

high skill

No wagechange, skillmix shif ts to

low skill

25% wageincrease,skill mixshif ts tohigh skill

25% wageincrease,skill mix

shif ts to lowskill

50% wageincrease, no

skill mixchange

per 1

,000

pop

ulat

ion

Baseline

Worst CaseBest Case

Project ions of past t rends

What are training costs to staff up to these levels?

Total Additional Training for All Staff

0

0.5

1

1.5

2

2.5

3

No w agechange,no skill

mixchange

25%w age

increase,no skill

mixchange

No w agechange,skill mixshifts tohigh skill

No w agechange,skill mixshifts tolow skill

25%w age

increase,skill mixshifts tohigh skill

25%w age

increase,skill mixshifts tolow skill

50%w age

increase,no skill

mixchange

milli

ons

corr

ecte

d fo

r zer

os

Best Case

Projectionsof pasttrends

Total Additional Doctors to Be Trained

0

100,000

200,000

300,000

400,000

500,000

600,000

No w agechange,no skill

mixchange

25%w age

increase,no skill

mixchange

No w agechange,skill mixshifts tohigh skill

No w agechange,skill mixshifts tolow skill

25%w age

increase,skill mixshifts tohigh skill

25%w age

increase,skill mixshifts tolow skill

50%w age

increase,no skill

mixchange

Best Case

Projection ofPast Trends

Total training Costs for IDA Countries under the Projection of Past Trends (millions, 2006 USD)

IDA, Projection of Past Trends

-2,0004,0006,0008,000

10,00012,00014,00016,00018,000

No wagechange, no

skill mixchange

25% wageincrease, no

skill mixchange

No wagechange, skillmix shifts to

high skill

No wagechange, skillmix shifts to

low skill

25% wageincrease, skillmix shifts to

high skill

25% wageincrease, skillmix shifts to

low skill

Publicexpenditures

on tertiaryeducation

Public expenditureson Tertiary Education

CHW, PH, and other

Nurses and midwives

Dentists andPharmacists

Doctors

Cost of Training Additional Health Workers

All, Best Case

0

10,000

20,000

30,000

40,000

50,000

60,000

No wagechange, no

skill mixchange

25% wageincrease, no

skill mixchange

No wagechange, skillmix shifts to

high skill

No wagechange, skillmix shifts to

low skill

25% wageincrease, skillmix shifts to

high skill

25% wageincrease, skillmix shifts to

low skill

50% wageincrease, noskill mix shift

Publicexpenditures

on tertiaryeducation

Public expenditureson Tertiary Education

CHW, PH, and other

Nurses and midwives

Dentists andPharmacists

Doctors

Would all migrants be able to find jobs if they did not migrate?

Nurse migration trends

0.02

0.01

0.02

0.01

0.01

0.01

0.02

0.04

0.01

0.00

0.00

0.01

0.01

0.01

0.29

0.00

0.00

0.00

0.04

0.08

0.00

0.01

0 .1 .2 .3Outflow of Nurses as share of Domestic Stock of Nurses

SSA

SAS

LAC

EAP

GhanaKenya

ZimbabweEthiopiaMalawi

SenegalSierra Leone

LiberiaGambia

CameroonUganda

IndiaPakistan

Nepal

HaitiPeruChile

NicaraguaBelize

PhilippinesIndonesia

Fiji

Nurse out migrations as share of domestic stock

See: “The Nurse Education and Labor Market in the English-Speaking CARICOM: Issues and Options for Reform,” The World Bank, DRAFT June 2008.

Fiscal Space and Nurse Migration

8.828.408.318.20

9.318.90

9.519.40

29.0228.8010.139.80

8.057.8021.36

20.106.175.90

10.5310.5010.0210.00

3.012.901.981.90

8.518.10

42.0923.90

9.089.0013.2013.10

12.0812.00

6.946.50

7.546.30

5.005.00

9.219.10

0 10 20 30 40

SSA

SAS

LAC

EAP

GhanaKenya

ZimbabweEthiopiaMalawi

SenegalSierra Leone

LiberiaGambia

CameroonUganda

IndiaPakistan

Nepal

HaitiPeruChile

NicaraguaBelize

PhilippinesIndonesia

Fiji

GHE/GE in di fferent scenarios

Baseline Government absorbs all nurses who migrate

What are the major fiscal and managerial bottlenecks to scaling up staffing?

What is the impact of government wage bill policies on the health workforce?

Are current human resources management policies and practices strategic?

Working in Health: Financing and Managing the Public Sector Health WorkforceMarko Vujicic, Kelechi Ohiri, and Susan Sparkes

The World Bank

Forthcoming in spring 2009

Large gap between the workforce level needed to deliver essential services and current employment levels in developing countries

Within the public sector a major issue is often lack of resources available to pay the salary costs of an expanded health workforce due, in turn, to restrictive policies on the overall public sector wage bill

While the debate has been intense there is a lot of misinformation and little documented country experience

Background

Objectives

Government

Fiscal

Policy

Policy Question #1 in Report:

What is the impact of government wage bill policies on the size of the health wage bill and on health workforce staffing levels in the public sector?

Health

Wage

Bill

Health

Workforce

Staffing Levels

Geographic

Distibution

Productivity

Absenteesim

Analyisis of

Other Human

Resource

Management

Functions

Analyisis of

Recruitment

Process

Analysis of

Wage Bill

Budgeting

Process

Policy Question #2 in Report:

Within the current health wage bill envelope, do the existing human resources management policies and practices lead to strategic use of wage bill resources?

Government

Fiscal

Policy

Policy Question #1 in Report:

What is the impact of government wage bill policies on the size of the health wage bill and on health workforce staffing levels in the public sector?

Health

Wage

Bill

Health

Workforce

Staffing Levels

Geographic

Distibution

Productivity

Absenteesim

Analyisis of

Other Human

Resource

Management

Functions

Analyisis of

Recruitment

Process

Analysis of

Wage Bill

Budgeting

Process

Policy Question #2 in Report:

Within the current health wage bill envelope, do the existing human resources management policies and practices lead to strategic use of wage bill resources?

Country Case Studies

DOMKEN

RWAZMB

Bet

ter t

han

aver

age

Wor

se th

anav

erag

e

Better thanaverage

Worse thanaverage-3

-2-1

01

23

Perfo

rman

ce re

lativ

e to

hea

lth s

pend

ing

-3 -2 -1 0 1 2 3Performance relative to income

Source: WDI

Maternal mortality relativ eto income & health spending, 2005

DOM

KENRWA ZMB

Wor

se th

anav

erag

eB

ette

r tha

nav

erag

e

Worse thanaverage

Better thanaverage-2

-10

1Pe

rform

ance

rela

tive

to h

ealth

spe

ndin

g

-2 -1.5 -1 -.5 0 .5 1Performance relative to income

Source: WDI

Births attended by skilled attendant relativ eto income & health spending, 2005

DOMKEN

RWAZMB

Wor

se th

anav

erag

eB

ette

r tha

nav

erag

e

Worse thanaverage

Better thanaverage-2

-10

1Pe

rform

ance

rela

tive

to h

ealth

spe

ndin

g

-2 -1.5 -1 -.5 0 .5 1 1.5 2Performance relative to income

Source: WDI

Health Workers per 1000 relativ eto income & health spending, 2005

DOM

KEN

RWAZMB

Wor

se th

anav

erag

eB

ette

r tha

nav

erag

eWorse than

averageBetter than

average-3-2

-10

12

3Pe

rform

ance

rela

tive

to h

ealth

spe

ndin

g

-3 -2 -1 0 1 2 3Performance relative to income

Source: WDI

Doctors per 1000 relativ eto income & health spending, 2005

Wage Bill Budgeting

Ministry

of Finance

Non-wage

Expenditure

Health

Workers

Ministry

of Health

Non-wage

Ministry

of Health

Wage Bill

Overall

Wage Bill

Non-Labor

Inputs

DISCONNECT

Separate Budgeting Process

Ministry

of Finance

Provincial

Health

Authority

Health

Workers

Facility

Non-Labor

Inputs

District

Health

Authority

Fully Flexible Budgeting Process

Zambia• In 2002, the Government of Zambia

implemented a hiring freeze as part of its program with the IMF, but explicitly excluded doctors and nurses.

Kenya• “Wage policy measures will include …

flexibility to allow for recruitment of medical personnel in order to aim at reaching the optimum level of personnel for the health sector and to move toward achieving the MDGs.”

Public Sector Wage Bill as Share of GDP

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

Zambia Rw anda Dominican Republic Kenya

Health Wage Bill as Share of Overall Wage Bill

0.0%

5.0%

10.0%

15.0%

20.0%

2000

2001

2002

2003

2004

2005

2006

2007

Zambia Rw anda Dominican Republic Kenya

Recruitment

Zambia• 1,700 funded positions• MOH was able to fill only 1,400 positions within the budgetary timeframe• Funding for 300 positions had to be returned to the Ministry of Finance

Kenya – different story

Current Status Number Unemployed 2064 Employed Private 1110 Other 661 Employed FBO 465 Employed MOH 166 Employed NGO 0 Total 4466

Wage Bill BudgetingDistibution of Civil Service Employees by Sector

(all levels of government)

0%

10%

20%

30%

40%

50%60%

70%

80%

90%

100%B

elar

us

Bot

swan

a

Bra

zil

Bul

garia

Cam

bodi

a

Egy

pt

Indo

nesi

a

Ken

ya

Leba

non

Mad

agas

car

Mex

ico

Mor

occo

Nic

arag

ua

Pak

ista

n

Phi

lippi

nes

Rw

anda

Turk

ey

OtherEducationHealth

Source: World Bank Government Wages and Employment Dataset

Impact on the overall public sector wage bill of changing staffing and wages in the health sector

– Kenya

2.41%12.04%9.63%

Increase salaries for all health workers by 25% (or increase number of all health workers by 25%)

1.19%10.82%9.63%Increase nurses' salaries by 25% (or Increase number of nurses by 25%)

0.24%9.87%9.63%Increase doctors' salaries by 25% (or Increase number of doctors by 25%)

Increase

Health Wage Bill/Total Wage Bill

NEW

Health Wage Bill/Total Wage Bill

BASELINEScenario

Sources: World Bank calculations based on Kenya Case Study

Impact on the overall public sector wage bill of changing staffing and wages in the health sector

– Zambia

2.70%13.50%10.80%

Increase salaries for all health workers by 25% (or increase number of all health workers by 25%)

Increase Education Wage Bill/Total

Wage BillNEW

Education Wage Bill/Total Wage Bill

BASELINE

2..66%15.04%12.38%Increase teacher salaries by 25% (or Increase number of teachers by 25%)

0.90%11.70%10.80%Increase nurses' salaries by 25% (or Increase number of nurses by 25%)

0.24%11.04%10.80%Increase doctors' salaries by 25% (or Increase number of doctors by 25%)

Increase Health Wage Bill/Total Wage

BillNEW

Health Wage Bill/Total Wage Bill

BASELINEScenario

Sources: World Bank calculations based on Zambia Case Study, Zambia Education Public Expenditure Review 2006

Key HRH management policies and practicesCreation of vacancies

• Often top down, not needs-based, no linked to geographic areas

Recruitment of workers• Takes too long (14 months in Kenya) to recruit new staff and to fill up

vacancies• Centrally managed

Terms of service (mostly related to civil service constraints)• Tenure

• Very little use of term contracts• Remuneration

• Salary and non-performance based allowances• Promotion and transfers

• Policies are not implemented• Not carried out in a strategic way

• Sanctions• Rare

Process for Filling a Vacancy in Kenya

Emergency Hiring Program - KenyaCharacteristic GOK Emergency Hiring Program Remuneration As GOK without pension but with gratuity of 31% of

basic salary per annum Tenure Permanent 3-year contract Recruitment process

Through Public Service Commission (PSC)

Delegated by PSC to MOH with technical support from the Capacity Project and Deloitte & Touche. Tight control to ensure no interference in selection process

Recruitment conditions

Merit-based for all who meet job criteria except staff currently employed by faith-based organizations (FBOs)

Deployment conditions

Recruited to public service, so can be deployed anywhere

Can only be deployed to designated districts selected by MOH and Capacity on the basis of staff shortage

Length of funding

Unlimited 3 years

Funding channel

Salaries paid directly to employees (PEPFAR funds) Direct to government (Clinton Foundation, GFATM)

Monitoring and evaluation

None Detailed monthly follow up to monitor numbers and location of staff

Time to fill a position

Varied; in some cases 10 months from advertisement to interview

Letters of appointments sent within 4 months of advertisement; first batch of staff in post within 5 months after receiving a 2-week induction course; second batch within 8 months

Is Money Scarce?

Not always. Wage bill budget execution rates can be very low

Year Dominican Republic

Kenya Rwanda Zambia

2004 95% 101% 99% - 2005 93% 99% 91% - 2006 107% - 91% 50% 2007 - - - 70%

Are People Scarce in Kenya?

Location of Residence

Total Applicants M/F

Total Qualified Applicants (Short-listed)

Total Selected Applicants (Deployed MOH)

6566 4466 677 Nairobi 494 338 7 Central Province 1197 898 71 Coast 224 143 49 Eastern 1138 834 36 North Eastern 100 72 110 Nyanza 1050 441 98 Rift Valley 1674 1247 149 Western 689 493 99

Conclusions

In the case studies…

• Fiscal constraints were not relevant in all countries

• Public sector management issues were a major constraint everywhere

Policy options

Strengthening accountability and improving human resources management capacity within the Ministry of Health;Using allowances more strategically and payment mechanisms other than salary; Enhancing the position of the Ministry of Health in the wage bill negotiation process; Improving the predictability of health wage bill budgets; Easing the fiscal constraint on the overall wage bill; Making better use of donor assistance for health; Transferring control of certain human resource management functions to the Ministry of Health while keeping the health workforce within the civil service; Decentralizing certain human resource management functions to the local level;Removing the health workforce from the civil service and the overall wage bill;