Analyzing Healthcare Budget Allocation: Effective Utilization and Shortcomings

LightCastle Analytics Wing
September 7, 2020
Analyzing Healthcare Budget Allocation: Effective Utilization and Shortcomings

The COVID-19 Pandemic has developed into an unprecedented test for the Bangladesh Healthcare sector, which has been bludgeoned by the rate of infection across the country. As it stands on 1st September 2020, Bangladesh has 310,822 confirmed cases, with 201,907 recoveries and 4,248 deaths. It is globally 15th on the ranking of most severely affected countries based on cases and deaths.

National Healthcare Vs. The Global Pandemic

From a lack of Healthcare Specialists to insufficient Intensive Care Unit bedding for patients, the stress on the sector has been unparalleled and is in dire need of scaling up, not only to combat the virus as it progresses, but to be prepared for future crises as the welfare of over 160 million is at stake. 

To put into perspective the unpreparedness of the sector, the country only has about 3 physicians per 5,000 of the population.[1] The Directorate General of Health Services (DGHS) has recently stated that there is only 733 intensive care unit (ICU) beds at government hospitals across the country, with 235 of them being added to combat the pandemic.[2] There are 55 COVID-19 Labs but approximately 64.2% of the tests are being done within Dhaka.[3] 

Figure: COVID-19 Statistics for the Past Two Weeks / Source: Coronatracker[4]

With the recent unveiling of the budget, urgent support and bracing of the healthcare sector is paramount in stabilizing not only the lives and livelihoods of the populace but in securing future economic growth prospects for the economy. 

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National Budget FY20-21 and Healthcare Allocation

The budget put forward has allocated a sizable amount to healthcare, which is a BDT 73 billion increase over the previous fiscal year[5] and can be summarized below:

Figure: Operating Budget FY20-21–Sectoral Allocation / Source: Government of Bangladesh
Figure: Development Budget FY20-21–Sectoral Allocation / Source: Government of Bangladesh

Despite the increase of the allocation from the previous year of  23.44% and the proposed BDT 10,000 Crore of emergency allocation for the sector, it is taking up a low share of the entire budget relative to other sectors.[6]

One major reason behind this may be that despite the need for healthcare expenditure, the sector itself does not have the capacity to utilize an overabundance of it. A report by the World Health Organization stated that the average healthcare expenditure in most countries is 2.3% of their GDP, while Bangladesh had less than 1% in FY19-20. [7] The allocation has been moderated with the growth capacity of the sector over the coming year in mind. This is also why the Development Budget’s allocation to the sector is closer to the Operating Budget’s allocation in absolute terms.

Utilizing the Budget: Public Healthcare Projects and Initiatives

In the ongoing plan to contain the pandemic and recover from it, the government has taken a number of measures including the recruitment of 2,000 doctors and 6,000 nurses on an urgent basis. 386 medical technologists and 2,654 lab attendants were recruited on an outsourcing basis. Also recruited were 1,200 medical technologists, 1,650 medical technicians, and 150 cardiographers.

To provide incentives and compensation, ensure the safety of frontline workers, provide compensation for the case of infection and/or death, and provide an honorarium to doctors, nurses, and healthcare workers engaged in the treatment of coronavirus patients, an allocation of BDT 850 crore has been made.

Other ongoing healthcare projects include the establishment of new medical colleges in Kushtia, Sirajgonj, Manikgonj, Jamalpur, Patuakhali, Tangail, and Sunamgonj, the development of the e-health infrastructure and telemedicine, expansion of Shasthyo Surokhsha Karmasuchi (SSK) in eight Upazilas, and establishment of secondary and tertiary health complexes at district, divisional and national levels. Recently completed was the setting up of the Jessore, Cox’s Bazar, Pabna, and Noakhali Medical College Hospitals.[8]

The 4th Health, Population, Nutrition Sector Program of which the Government currently bears 84% of the project cost, is being implemented to help ensure holistic nutrition for all by 2030 in line with the Sustainable Development Goals.[9]

Under the National Nutrition Services (NNS), The “Improvement of Child and Maternal Health System” and the “Maternal, Neonatal and Child Adolescent Health” projects are currently ongoing. Associated with these, 24-hour delivery services in 2,854 union health centers and emergency maternity services in 72 mother-and-child welfare centers have been introduced.

Over the next year, there are plans to establish 40 union welfare centers, 25 delivery welfare centers, 3 twenty-bed hospitals, 3 fifty-bed Upazila health complexes, and 1 hundred-bed children’s hospital in Cumilla.[8] 

Multilateral Organizations such as The World Bank and Asian Development Bank have also submitted their budgets for public healthcare projects estimated at BDT 11 billion and 14 billion respectively, with the farmer already having been approved. These projects are aimed at the provision of ventilators across different hospitals. Loans from multilateral will be utilized in equipping airports with scanners, and building ICUs, Isolation centers, etc.[5]

Pitfalls and Opportunities Aplenty

✪ A lack of capacity is the most urgent problem that needs solving. The accommodation in hospitals in comparison with the number of patients is unsatisfactory and urgent capacity-building expenditure must be undertaken. 

✪ Current hospitals across the country are very disparate when it comes to the endowment of medical technology and equipment. The provision of such must be undertaken to ensure better treatment of patients, especially away from the Capital.

✪ There is a high degree of corruption, selective catering with healthcare services, and dishonest practices prevalent all across the sector. There must be more focus on regulating these practices and stronger legislative action against guilty parties.

✪ More investment must be put into Health-Tech to ensure easier access to citizens. Sub-sectors such as Telemedicine have proven to be highly perspective, especially in the wake of COVID-19. (See also: Telemedicine for Bangladesh: Bridging the Doctor-Patient Gap[10])

✪ Some regulation on the government’s part to ensure private sector price stability of certain medical equipment such as the increasingly necessary oxy-meters and oxygen cylinders can go a long way in minimizing fatalities from lack of admittance in hospitals.

✪ A sizable provision must be set aside for medical research and centers for such research must be established as soon as possible.

Sartaz Zahir, Content Writer, and Sanjir Ali, Senior Business Consultant and Project Manager at LightCastle Partners, have prepared the write-up. For further clarifications, contact here: [email protected]


  1. Physicians (per 1,000 people) – Bangladesh | Data -The World Bank 
  2. 733 ICUs at government hospitals, govt informs High Court – The Daily Star
  3. COVID-19 Situation Report #5 Bangladesh – World Health Organization
  4. Bangladesh COVID-19 Corona Tracker – Coronatracker
  5. FY 21 budget: BD to unveil mega health plan – The Financial Express
  6. The health sector gets priority in the budget for 2020-21 -The Business Standard
  7. A larger health budget is essential -The Business Standard
  8. Economic Transition and Pathway to Progress(Budget Speech FY20-21) – Government of Bangladesh
  9. 4TH Health Nutrition and Population Sector Program (HNPSP) – Government of Bangladesh
  10. Telemedicine for Bangladesh: Bridging the Doctor-Patient Gap – LightCastle Partners

WRITTEN BY: LightCastle Analytics Wing

At LightCastle, we take a data-driven approach to create opportunities for growth and impact. We consult and collaborate with development partners, the public sector, and private organizations to promote inclusive economic growth that positively changes the lives of people at scale. Being a data-driven and transparent organization, we believe in democratizing knowledge and information among the stakeholders of the economy to drive inclusive growth.

For further clarifications, contact here: [email protected]


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