Recurrent cost and public health care delivery: The other war in El Salvador

This study analyzes the causes and effects of the persistent underfinancing of recurrent costs in the Ministry of Health (MOH) of El Salvador over the past decade. Causative factors identified and discussed include (1) a functionally unintegrated MOH structure--consisting of (a) the autonomous hospitals and (b) the remainder of the Ministry; (2) the functional isolation of the Ministry's planning department from its budgetary department; (3) the use of historical-budget based decision-making--in lieu of more explicitly goal oriented resource allocation and planning criteria; (4) donor agencies' funding of infrastructure construction projects, coupled with their unwillingness to financially support the recurrent costs such projects ultimately give rise to; and finally, (5) the civil war and its associated economic dislocation, altered central government funding priorities and general state of disarray. The effects of persistent underfinancing of recurrent costs in El Salvador are the growing proportion of the MOH budget being consumed by outlays for personnel at the expense of virtually all other budgetary categories; the shortages of drugs and general medical supplies in public health facilities; and reduced levels of utilization of those facilities from what would otherwise be expected; all of which together imply a reduced level of both productivity and effectiveness of the public health care system. Policy implications and recommendations are briefly noted.