Equity and efficiency in the geographic allocation of public health resources in Mozambique

Equitable and efficient health financing is crucial to improve health care provision, still inequitable in many low- and middle-income countries. The allocation of financial resources across geographic areas is important to increase the capacity to effectively provide services and their availability to the neediest population. However, how resources are transformed into service and finally reach the intended beneficiaries, depends on local health care management, on the supply-side, and on constraints to service use, on the demand-side. Equity and efficiency in the geographic allocation of public expenditure in Mozambique, and their determinants, are explored in this thesis. First, inequities in the distribution of public health expenditure, assessed using a method based on Benefit Incidence Analysis, diminished over time due to improved resource allocation. However, inequities in health care use remain and limit the benefit from public health expenditure for the poor and neediest population. The difference between horizontal and vertical equity, assessed for each source of public health expenditure by raking individuals according to their economic wealth or to their need for health care, reveals initial discrepancies in government and donor expenditure targets and the potential trade-offs between equity objectives. Second, inefficiencies in health care provision, assessed using Stochastic Frontier Analysis, exist at district level. Efficiency could be increased both in health administrations, where financial resources are managed to guarantee the availability of material resources, such as staff and equipment, and in health facilities, where those are used to deliver health care services. Heterogeneity in efficiency across districts depends on geographic, demographic, administrative and health system characteristics. Third, results from an econometric model of demand for health care revealed that proximity to health facilities increases the probability of seeking care and that the availability of adequate staff and equipment can encourage service use by those who live near a health facility. Demand side constraints, mostly economic, prevent use even when services are available. Results suggest that resource allocation policies are insufficient on their own to improve the distribution of public health expenditure. Extending health facility coverage and tackling demand-side barriers are needed to increase service use among and mitigate potential equity efficiency and horizontal-vertical equity trade-offs. Increasing the efficiency of district health administrations and health facilities can contribute to increase service use among those who live close to a health facility.