Andhra Pradesh Health Sector Reform - A Narrative Case Study

treatment at these institutions and assistance for care of children with heart
problems. The remainder is spent on provision of tertiary care services through
intuitions under the DME.
• Social Protection Schemes: This represent the major difference in health care
expenditures the last couple of years. The allocation has gone from one percent of the
DoHMFW expenditure to an estimated allocation of 16 percent. This is mainly
through the introduction of the community health insurance scheme Aarogyasri
which covers the major health care expenditures for people below poverty line and
mitigates the risk of indebtedness due to costs of tertiary care.
• Other: Expenditure on government administrators includes that on secretariat and
state and district headquarters of sub‐departments. They account for about eight
percent of the budget. Other training and education institutions account for about
one percent of the budget.
Expenditure by Societies
In Andhra Pradesh, there are many societies, non‐profit organizations that address specific
health issues such as Tuberculosis, HIV/AIDS, Malaria, Leprosy and blindness. The purpose
of these societies appears primarily to serve as a conduit for an easy transfer of new funds
directly to entities related to vertical programs. The societies are primary funded by external
aid and the Government of India. Share of the expenditure from the State Government has
been minimal.
Health Expenditure by Other Departments of State Government
Health expenditure by other departments includes (i) expenditure on Insurance Medical
Services by Department of Labor, (ii) expenditure on Tribal Health Services by Department
of Tribal Welfare and (iii) expenditure on Integrated Child Development Services (ICDS) by
Department of Women Welfare and Child Welfare.
Additional State Allocations towards the Health Sector Reforms
The Government of Andhra Pradesh has developed a Mid‐Term Expenditure Framework
(MTEF) to identify a sustainable resource envelope and match this to the cost to implement
the health strategy. Based on the MTEF suggestions, the government has committed to
increase allocation to the health department over five years from USD 316.8 million to USD
762.1 million between 2006 and 2011. This will raise the share of health expenditure from 3.7
percent of government expenditure to 5.5 percent and per capita public health expenditure
from USD 4 to USD 9. The budget for 2008‐09 provides a public expenditure per capita of
USD 8, which is close to the set targets.
The additional resources for health care have been critical for the development of the major
contract arrangements and especially the health insurance scheme but it was also evident
that the financial management of the Department of Health, Medicine and Family Welfare
(DoHMFW) had to improve. The Andhra Pradesh Health Sector Reform Programme
(APHSRP) went into effect with the aim to strengthen the management of the DoHMFW,
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