Andhra Pradesh Health Sector Reform - A Narrative Case Study

sources of funds. The amount is not significant in relation to the overall health care budget of
the government, but the CEO of EMRI has said that they do not want the government to
cover 100 percent of the costs. The five percent covers the top management, research,
national training and the development of new innovations and technology. The top
management costs include salaries to these key people and the government will not be able
to motivate the same salaries. Another reason to prefer funding from outside the
government is to maintain flexibility in decision making. Currently, it is still unclear how
EMRI is to meet the non‐government funding gap in a sustainable manner.
The Government of India has indicated that the state will have to step in and cover
operational costs and the National Rural Health Mission will consequently reduce its share
of the funding. The state government is encouraged to initially cover 40 percent of the costs
and then increase to 60 percent and subsequently 80 percent of the funding. The objective,
according to the Government of India, is to encourage States to commit to higher public
expenditures in health. The former Principle Secretary of Health in Andhra Pradesh has
shared that the State Government probably will be able to reallocate resources and meet
these funding needs, but that this is depending on political commitment and that it is still
unclear what the results from the 2009 election will bring.
Another challenge is the central problem and lack of an independent monitoring system
which can validate the data provided by EMRI. The evaluation report from NRHM
highlights there is no “contracts management cell” in the state government and the secretary
deals with the data directly and there has not been sufficient time and resources allocated to
analysis and validation of this data. The data provided by the EMRI is the basis of all
decision making, hence the management of the contract must be strengthened.
Another central problems faced by the government is insufficient transparency in addition to
the performance data. There is no member from the government on the board of EMRI or the
executive committees, to ensure this transparency. There has not been much consultation
with the government regarding EMRI.
The report from NRHM concluded there is a need for a closer look at the costing with
benchmarks, as well as at the contractual arrangements. There is no doubt about the
government’s strength in terms of innovation and ability to find new approached to
effectively address major problems, while there is a general impression that the government
needs support for the creation and management of the large contractual arrangements with
private providers. This could address accountability issues towards the public currently
being suspicions about the allocation of tax money and the government’s association with
the fraud colored company Satyam.
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