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A Report on
Health Sector Decentralization
In Nepal
A term paper submitted to fulfill the partial requirements of bachelor degree of Public Health
(BPH) fifth semester
Submitted by
Group 8
Batch: BPH 8th
Submitted to:
Faculty of Public Health
School of Health and Allied Sciences
Pokhara University
May 2018
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Acknowledgement
It gives us great pleasure, to present the term paper on the topic “Health Sector Decentralization
In Nepal” which will give information about the history , importance present condition of
decentralization in Nepal.
We would like to express our sincere thanks to the respected subject teacher Dr Damaru Prasad
Paneru ,Director , Public Health, Pokhara University who provided valuable suggestions and
regular supervision, encouragement, constant inspiration and continuous support for the
preparation of this term paper.
Surely this term paper would not have seen the light of the day had it not been for unstinting
support of our coordinator Mr. Chiranjivi Adhikari and teaching associate.
We would like to thanks our senior batch students for sharing their pre-experience knowledge.
Lastly, we like to acknowledge all people who are directly/indirectly related to this works and
helped us.
Finally, we would like to express our gratitude to our respected parents and family members for
their blessings, understanding, continuous inspiration and encouragement.
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TABLE OF CONTENT
SN Topic Page
1 Introduction 4
2 Objectives 5
3 Methodology 5
4 Finding
1. Conceptof Decentralization
2. Legislation and Its effect
3. Spatial Hierarchy
4. Decentralized Planning
5. DECENTRALIZATION VS. FEDERALISM
6. Problems in Nepal's Health Sector Decentralization
5-16
5 Conclusion 17
6 Reference 18
Group Member
1. Rakshya Sharma
2. Rakshita Lamichhane
3. Nisha Thapa Magar
4. Pragati Sharma
5. Pragya Banstola
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1.1. Introduction
Decentralization means the transfer of power, resources and responsibility from a central
authority to the local bodies. Decentralization of power is both horizontal and vertical terms.
The process of dispersing decision making governance closer to the people/citizen which
includes administrative, political, economic etc is known as decentralization.
Decentralization has been an incessant theme in Nepal over the last five decades. It has evolved
according to the rationale of successive regimes It ranges from the Rana Rule (pre-1951), for
cosmetic purposes, to the Panchayat period (1960-90), to sustain elite power and further, for
good governance after the restoration of democracy (post 1990). Some legal initiations which
include Local Administration Act (1965), District Development Plan (1974), Decentralization
Act (1982), Local Self –governance Act (1999) and etc. have been carried out. Besides, 13 high-
level task force /commissions were constituted for decentralization in four decades However,
there is centralized government structure as problem which loathes delegating authority .In
Nepal, the existing centralized decision-making, planning and budgeting system as well as
central control of resources has been considered major constraints in the good governance and
decentralization reform process. In this context, the overall administrative system, staffing
arrangements and accountability needs to be shifted from a central to local orientation. The
resistance from line ministries to devolve resources both financial and staff to local governments
has been a major constraint .
Weak capacity, structure, excess number and size of local governments are another serious
constraint, which needs to be reviewed. The number of local governments in Nepal is
unreasonable and too large for effective and efficient planning, administration, coordination, cost
efficiency, resource allocation and service delivery
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2. Objective
 To review the concept of decentralization, and analyze legislation process and its impacts
in health service delivery particularly in Nepal.
 To describe the problems arising in decentralization in health sector in Nepal
3. Methodology
Division of work among the group members , group discussion was upmost . This study adopted
qualitative methods. For this secondary data/ information were generated and utilized. Secondary
information was collected from sources such as Nepal's government's appropriate documents,
office records of relevant offices, published and unpublished information by various individuals
and the institutions.
Keywords were identified and information was searched as per it
Keywords Site Result Article taken
Decentralization and health
sector in nepal
Google 450,000 3
“National health policy
1991”
Google 162,000,000 1
National health sector
strategy nepal
Google 9,270,000 1
Second long term health
plan
Google 400,000,000 1
Local self governance act
nepal
Google 2,140,000 1
4. Findings
4.1. Concept of Decentralization
Decentralization is widely believed that it increases possibilities for participation of all
stakeholders; people would be empowered to manage their affairs; people shoulders
responsibilities and feel ownership; and there would be a more efficient provision of public
goods and services for the people in general and the poor in particular. Therefore, Government of
Nepal (GON) emphasizes on decentralization to devolve power in order to provide health service
at door steps of people.
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Conceptually, decentralization within the state involves a transfer of authority to perform some
service to the public from an individual or an agency in central government to some other
individual or agency which is closer to the public to be served . The transfer of authority can be
done two ways: territorial and functional. The basis of transfer of territorial authority is placed
at the lower level of territorial hierarchy where service providers and clients are geographically
closer. Similarly, the authority transfer can also be made functionally.
There are three types of such transfer of authority
 within formal political structure
 within public administrative or parastatal structure
 from an institution of the state to a non-state agency
Expected benefits of the decentralization are assumed as it would
 Promote local democracy
 Mobilization of people’s participation politically
 From Administrative view points, it improves administrative efficiency
 Make government quickly respond to the needs and aspirations of the peoples.
 Enhance the quantity and quality of services, government provides to the people.
 From development view point, it lead better decision-making and greater efficiency and
effectiveness on locally specific plans, inter-organizational coordination, motivation of field
level workers.
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However, these proposition of decentralization’ benefits seem from normative stance. It can be
argued that the possibilities of cost and risk of decentralization viz: loss of high scale of
economies and generation of duplication and unemployment of staff and equipment. It can create
coordination problem among inter- or intra- organizations within the state. Due to lack of
resource, there might be institutional constraints that can hardly cope with the need and
aspiration of the people. The possibility of disintegration of state also can be denied in
decentralization process. In practice too, the challenges of good governance through
decentralization are many. In most developing countries, there has been tendency for
independent governments to prefer delegating power within the public service [deconcentration]
rather than to locally elected authorities [devolution]. There has been much rhetoric about
participation and local autonomy, but central governments have jealously guarded their power.
4.2. Legislation and Its effect
Case of Nepal, GON has introduced one of the world's most progressive legislation for
decentralization in the world devolving primary responsibility for local development to elected
local authorities.
While the Local Self-governance Act (LSGA) mandates local government bodies to manage and
supervise sub or Health Post (S/HP) and their functioning, local committees and Village
Development Committee (VDC) and bodies like Health Management Committee (HMC) should
control resources and management of S/HP. Another discrepancy is the allocation of
responsibilities without any provision for the required resources. These differences in rules and
regulations between LGSA, 10th Plan and Ministry of Health and Population (MOHP)
guidelines and the role of local bodies (VDCs, and District Development Committees-DDCs) are
a major concern for enhanced community ownerships of S/HPs.
Currently VDCs receive central government grant of which 25% are earmarked for social
services including health. In addition, VDCs can generate additional resources to cover the
services. No extra central government funds accompany the new arrangements under SHP
handover. While the committees have the responsibilities to oversee and monitor the functioning
of health staff, they have no responsibilities for their hiring and firing, which remains under the
MOHP. The chair of the SHP health committee is the VDC chairman when in post. In the current
climate the chairman is the VDC secretary. The guidelines state that the committee must have
four women as members and two candidates have to represent the dalit/Janajati community.
The Decentralization Act of 1982 and respective by-laws of 1984 were milestones in
accelerating decentralization in Nepal. Later, the statutory framework for decentralization and
local governments was defined by the LSGA, 1999 and the Local Self-Governance Regulation,
2000.10 In addition, a number of other policy initiatives also had a significant bearing on the
overall reform framework for decentralization, inter alias: the High Level Decentralization
Implementation Monitoring Committee, Local Bodies Fiscal Commission (LBFC) and the Sector
Devolution Guidelines. Key reform measures in the health service include: the Health Policy,
1991, Second Long Term Health Plan (SLTHP,1997),
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Nepal Health Sector Programme – Implementation Plan (NHSP-IP, 2004),13 successive annual
work program and budget (AWPB).
MOHP’s decentralization policy directives focused only on the handover of health facilities to
Health Management Committees (HMCs) and assigned responsibilities to manage local health
facilities and prepare and implement health programs . In 2002, the Ministry of Health realized
the weaknesses
in the previous policies and the need for a more radical reform measure to overcome systemic
problems for improved service delivery. With this vision, the Health Sector Strategy (HSS): An
Agenda for Reform15 and subsequently, the Nepal Health Sector Program Implementation Plan
(NHSP-IP), 2004 were developed. The HSS and NHSP- IP set key reform measures and actions.
The focus of the reform was to establish appropriate structures at different levels, strengthen
sector management, and improve service delivery through deconcentration .
The Table-1 below presents implementation status in brief on the proposed measures.
Policy reform Proposed policy
actions/instruments
Implementation status*
Endorsement of
management model for
decentralization
Strategy for decentralization
approved by 2004;
Management functions delegated to
regional level by 2006/07;
Decentralization model
implemented by 2006/07
Strategy was approved by
cabinet in 2006. However, due
to lack of costed plan and
commitment from government
the strategy never received
adequate support
Restructuring of MOH MOH restructured by 2005/06;
Human Resources Development
(HRD)
policy finalized by 2005/06;
District based planning, budgeting
and
performance management system
developed by 2005/06;
Joint planning system strengthened
New HRD and financial
management division
established without clear
policy on HRD;
No initiative in preparing
district plan; Joint Annual
Review of government and
donors partially addressed the
planning issues
Capacity Development Carryout horizontal, vertical and
internal analysis and agree on the
division of labor and functions;
Capacity building program
designed & implemented
MOHP commissioned the
study but the findings were
not operationalized;
Lack of complete package of
capacity measures for
implementation
Management of health
facilities by Health
Health facility (HFs) handover to
local HMC in all 75 districts;
Only 1433 HFs of 28 districts
handed over to HMCs;
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4.2.1. National Health policy 1991AD
• Regionalization and decentralization processes will be strengthened. Peripheral health
units will be made more autonomous and effective
• Of the various organizations providing health services at different levels, the district
health organizations will be given a most prominent role.
• Arrangements will be made for local level planning and management of curative and
promotive health services, with priority given to preventive health services, from the
district to the village level
• Micro planning procedures will be adopted in formulation of primary health plans at the
village level under which health services will be provided to all target groups with special
efforts to reach the underprivileged group.
4.2.2. SLTHP (1997-2017AD)
• Equitable access to quality health services in rural and urban areas
• Health services are characterized:
 self reliance,
 full community participation
 decentralization
 gender sensitivity
 effective and efficient management
 improve inter-and intra-sectoral co-ordination and to provide the necessary
conditions and support for effective decentralisation with full community
participation.
Management Committees
(HMCs)
10% of health spending born by
elected local bodies (LBs) by
2006/07;
HMCs design the service packages
Health sector did not get
proposed funding level;
Lack of capacity among
HMCs could not design the
service package
Inter-sectoral
coordination
Coordination with key line
ministries established;
Mechanism of coordination with
donor partners to support district
level delivery within a sector-wide
approach
Lack of functional
coordination
mechanism;
Donor coordination at district
level issues are yet to be
addressed
Provision of essential
health care services
Prioritized services delivered by all
health facilities;
Quality criteria developed and
implemented
Limited range of services
available; Quality criteria
available but not
practiced
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4.2.3. Health Sector Strategy (2003/4)
• NHSS prioritizes the implementation of the “Collaborative Framework for Strengthening
Local Health Governance in Nepal”.
• As outlined in the Framework this initiative strengthens overall local health governance,
transparency, accountability and responsiveness.
• It promotes participatory development and prioritizes health within the local
development agenda.
• This initiative attempts to redefine the roles and responsibilities of collaborating
partners, leading to a new stewardship role of the MoHP at central level and more
evidence-based local planning and decision-making at district, municipality and VDC
levels.
• The introduction of more decentralized planning and resource allocation is accompanied
by further introduction of flexible health grants through the District Development Fund
• NHSS imparts necessary authority to the regional health structure to ensure sufficient
linkages between the district and national levels in terms of local health planning and
budgeting processes
• It also recognizes the important role of the regional level to continuously monitor the
equitable delivery of quality health services at sub-national levels.
4.2.4. Interim Constitution of Nepal 2007AD
Health as fundamental human right and service delivery through decentralized manner. NHSP
II include the local health governance as a core output.
4.2.5. Collaborative framework between MoHP and MoFALD
Collaboration between MoHP and Ministry of Federal Affairs and Local Development
(MoFALD) at different level was based on win- win approach. It is a milestone for
strengthening participatory development and local governance in the long run
Shared Vision
Strengthen and institutionalize local health governance to efficiently improve access to and
coverage of quality health services focusing to poor and marginalized groups in particular,
through participatory local governance framework.
Objective
Improve health service management by
 Advocating health as prioritized local development agenda
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 Partnering with community organization under the umbrella of local bodies
 Strengthened local accountability and ownership
 Participatory planning and management
Agree Principle
 Strengthening local governance and local health system
 Adapting multi-sectoral approach for better health outcomes
 Advocating health as a broader local development agenda
 Improving responsiveness, local leadership and ownership
 Emphasizing community empowerment, participation and accountability.
4.3. Spatial Hierarchy
In Nepal, the territorial units within a country divided into fourteen zones, 75 districts and more
4000 village development committees and a number of municipalities for the political and
administrative purpose in 1963. The zonal level was created basically for political purpose to
filter political representation to the Rastriya Panchayat (National Assembly) and for security
surveillance. The districts were assigned administrative and development functions, which later
(1965-70) were considered the basis of decentralization. In 1972, the country was divided into
four development regions and later (1978) into five.
Since the formation of development regions in 1972, various ministries established their regional
offices/directorates at the designated regional centres with dismantling of department of the
various sectoral ministries. There are five health regional directorates. These offices act as pool
between the central and district health office. These offices collect the monthly report from
districts and zonal offices and reports periodically to the Ministry. Later on, these regional
directorates are kept under the Department of Health Service (DOHS) which was revived after
the restoration of democracy. These regional health offices are not under the control of regional
administrative offices but accountable to the respective central offices. It made regional level as
superfluous hierarchy.
After the restoration of democracy, zonal administration was abolished as a vestige of autocratic
regime. But, there are ten zonal hospitals in the country. These zonal hospitals were established
under the developmental act (2059 BS). These hospitals are directly accountable toward
Ministry, not regional health directorate or regional administration. Zonal and regional
administrators have been appointed recently due to security reasons not development concern.
These regional and zonal offices have no right to monitor, supervise and giving feedback to
regional service delivery offices e.g health offices. The underlined reason is that there was not
adequate delegation of authority whereby these regional offices became redundant hierarchy
between central and district level. Besides, the applications of regional perspective in Nepalese
development are the highly centralized system of governance and the primacy of sectoral
approach.
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4.4. Decentralized Planning
The decentralized planning process emphasizes to ensure active people’s participation in local
development process aimed at enhancing the production of goods and services for the
promotion of the welfare of the local people in general and rural poor in particular . It makes the
people focal point for entire development activities and goods and services. Similarly, it
mobilized the public, private, corporate bodies and social and NGOs sectors for accelerating
development process at local level.
So far decentralized health planning is concerned; health service delivery is arranged along
sectoral line agencies and local health organization. Ministry of Health and Population
(MOHP) and its departments along with other private and NGOs cover health sector.
Generally they follow directives and targets set by national development policy and plans. But
the ministry and department have their own policy and programme. There is virtually a weak
mechanism for feeding the concerns of the local communities into the planning process,
because the planning levels are physically and institutionally far from local people. However,
this necessarily does not mean that there no integration of planning efforts across different
sectors, but integration often takes place at higher levels where the decisions are made on the
allocation of resources.
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At the implementation level, there is little integration among the line agencies. Some integration
appears where the extension services are multipurpose and cover wide range of areas, but
planning and intervention of programme are generally carried out by each separate technical
team recruited by Central government in accordance with what they consider to be priorities for
their sector .
According to UNFPA, the management at the MOHP suffers from over centralized planning and
budgeting, poor financial and information management, a personnel system too dependent on
informal criteria, poor staff motivation and poor supervising practices. Furthermore, there is lack
of "objective" evaluation. In case of health service, problems are underreported and
achievements over reported (UNFPA: 1989). A lack of trained staff to do policy analysis is a
further problem It appears that one problem reinforces the other problems, and that for example
the absence of specification and appropriate planning is aggravated by incorrect information.
4.5. DECENTRALIZATION VS. FEDERALISM
On 28 May 2008 the Constituent Assembly declared Nepal as Federal Democratic Republic. One
of the important questions on the current decentralization policy is whether the policy is still
relevant and does it fits to the new federal structure or not? Federally constituted states can be
highly centralized and states constituted in a unitary fashion can be highly decentralized. The
two terms federation and decentralization deal, hence, with different levels of decision making:
federation refers to a trait in the constitutional level whereas the term decentralization describes a
policy choice on the post-constitutional one. This implies that a federal structure can be used to
implement a decentralization policy, the two are thus not mutually exclusive. But it also means
that a federal structure is not a necessary condition to implement decentralization policies.
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Federal
Province
Federal Super
specialized
Hospital
Municipal
Hospital and
Municipal Health
Office
Provincial Referral Hospital /
teaching Hospital
PHCC
Village /
community
health office
Urban Health
Promotion
Centre
Hospital
,PHC,HP, CHU,
PHCORC
Community
Health Center
Local
Health Services Organizations in Federal Context
15 | P a g e
4.6. Problems in Nepal's Health Sector Decentralization
4.6.1. Lack of clear-cut policy
To effectively manage handed over HFs under decentralized setting, it requires clear cut
directives from the central level regarding the authority delegated at various levels, and the scope
of work assigned to various concerned bodies such as MoHP, Department of Health Service
(DoHS), DDCs, VDCs, HFs and HFOMCs themselves.
Although the process of handing over HFs started in 2000, the roles and responsibilities are not
yet clear. Within the MoHP, the exact roles of different divisions and centers are unclear. Other
key partners and stakeholders such as the Ministry of Local Development (MoLD), DDCs,
DPHOs, HFs, VDCs and supporting partners, are also in a state of confusion with regards to their
respective roles and authority. For example, DPHO assume that the DDC is more responsible for
the management of handed over facilities and vice versa. DDC authorities, including the DDC
Chairman and Local Development Officer (LDO) are busy with other responsibilities and as
such, the management of HFs is not a priority.
Furthermore, it is important to mention here that health staff under the devolved districts has dual
loyalties. For example LDO has supervisory authority over health staff on day to day issues like
vacation, travel etc. but broader aspects of personal management like performance appraisals,
promotions and deputations are still handled by health ministries . The above situations are the
result of a lack of clear cut policy directives from the centre. Therefore, amendment of such
contradictory and ill defined policies is essential.
4.6.2. Lack of coordination among different sectors:
To manage the HFs that have been handed-over properly, there is an urgent need for
coordination between the Ministries and intra-ministerial divisions at MoHP, DoHS, the centre
and districts, DDCs and DPHOs, DDCs and VDCs, DPHOs and HFs, HFOMCs and HFs,
HFOMCs and communities, etc. Coordination among these stakeholders- at both vertical and
horizontal levels- has remained weak. In many cases, disputes have occurred due to a lack of
understanding and coordination among various stakeholders.
4.6.3. Handover process not conducted properly
The handover process of the HFs to HFOMCs was carried out in haste and without any
preparation. For example, in some cases, VDCs received a fifteen day notice that HFs would be
handed over to the community. As such, when the DDCs invited the community for the handover
ceremony, HF in-charges themselves were not aware it was happening. Orientation sessions are
needed to better prepare and sensitize not just the community, but all concerned actors, about the
handover process.
4.6.4. Lack of coherence on capacity building of local bodies:
Merely ensuring the handover process was properly carried out, however, was not sufficient. The
capacity building of HFOMCs was deemed necessary, which many organizations in the past few
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years have been actively involved in, albeit with their own schools of thought on the process and
content. Initially, capacity building of HFOMCs was not thought of as a process, rather, it was
being equated to a one-time event or training and was given low priority with regards to follow-
up, monitoring, coaching and periodic review.
Moreover, the training component was not smoothly conducted, being more knowledge-based
instead of a mix of knowledge and skills. In addition, since handover and orientation was not
properly or adequately carried out, HFOMC member’s level of knowledge and skills on health
facility management was poor. Most members were not aware of their roles and responsibilities.
These are the main reasons why despite long engagement of a large number of organizations,
strengthening of HFOMCs did not make headway. A complete capacity building package is
needed, where the training component is only one element among many. Therefore until and
unless there is capacity within local bodies to bear the devolved authorities and responsibilities,
backed by consolidated and effective capacity building measures, health sector decentralization
won’t achieve its desired objectives.
4.6.5. Lack of electedlocal Bodies:
Lack of elected bodies at the VDC level is another key reason why decentralization is not
making expected progress. As per the present strategy, the chairman of the VDCs is to chair the
HFOMCs. In reality however, in the absence of a locally elected body, the VDC secretaries are
currently chairing them. VDC secretaries seldom go to the village, preferring instead to remain at
the district headquarters. Lack of security is one of the reasons cited why they don’t prefer to go
the duty station.
4.6.6. Federalism and state restructuring process in Nepal
As a result of recent political development, Nepal has become a Federal Democratic Republic
and the country is in the process of political restructuring. Due to this development, there is
confusion on how the decentralization process is to move ahead, including its relevance when
such structural changes happen. In fact the difference between a unitary and a federal state is not
that one is more decentralized than the other, but that the former can be decentralized through
legislation whereas the latter is decentralized by constitution. Federally constituted states can be
highly centralized and states constituted in a unitary fashion can be highly decentralized. Since
there is still political debate and dialogue regarding modality of state restructuring including
federalism, it has major implications on the further progress of health sector decentralization at
both policy and operational levels, directly and indirectly.
4.6.7. Health sector financing, human resource policy and capacity issues
The budget process was more of an input-based (facilities and beds rather than e.g. disease
burden). The per capita expenditure by Government in health has increased from five US dollars
in 2004/05 to eight in 2007/08. Similarly, the proportion of health sector budget out of the total
national budget has increased. However, poor financial performance caused by rigid financial
procedures and lack of timely disbursements of budget in the public sector has created an
17 | P a g e
imbalance between allocation and expenditure. Though, gradual improvement in this area has
been observed since 2004/05.
Lack of a decentralized human resource policy is one of the critical issues in the overall
management of human resources in Nepal’s public health system. The country experiences of
Mexico, Ghana, Indonesia and South Africa show mixed results in terms of human resource
management at decentralized levels.27 It has been cautioned that without a comprehensive
human resource policy addressing skills, staff equity, staff motivation and performance under
decentralization at different levels any attempt to decentralize human resources is unlikely to
succeed. The hesitation and unwillingness of the health personnel to work under the local
government shows clear resistance from the side of civil servants which might have
unforeseeable implications for future policy decisions. However, the reason for unwillingness
might partly be due to the timing of decentralization, political conflict, and absence of legitimate
committees. As neither DDC nor VDC representatives would have decision making authorities
in terms of management, handing over of health facilities to local government would create
further confusion and delay in implementation.
5. Conclusion
Decentralization was taken as a convenient tool to reinforce respective regime’s political power
in spite of incessant theme in Nepal over last five decades. Some legal initiations for the
decentralization were also made. At present, LGSA is in the operation. It mandates local
government bodies to manage and supervise S/HP in order to deliver health service effectively
including other developmental activities. However, there is mismatch between the allocation of
responsibilities and the provision of required resources. There are contradictory rules and
regulations between LGSA, 10th plan and MOHP guidelines and the role of local bodies. As a
result, the jurisdictions of the local bodies and the line agencies overlap. Local bodies can not
influence the decision-making of line agencies.
GON has constituted regional development office to facilitate and support the local level so
that people would not come to central level. In this line, five health regional directorates were
established. Similarly, zonal offices also established with the aim to monitor, supervise and
giving feedback to the local health offices. However, these zonal and regional health offices
became redundant between central and district level. It is because that there was not adequate
delegation of authority to regional and zonal office. These offices can not do anything except
collecting monthly reports. The applications of regional perspective in Nepalese development
are the highly centralized system of governance and the primacy of sectoral approach.
Decentralized health planning seems only in name but not in function because the planning
levels are physically and institutionally far from the local people. Local people hardly know
the information about the planning mechanism of health
The health service sector is target based where the target is passed down from the top i.e. from
the National Planning commission to Ministry level to the local level. Generally, local health
organization follows directives and target set by national development plans and policy. But the
18 | P a g e
ministry and department have their own policy and programme. But, very often the target given
to the local levels is unrealistically high and impossible to fulfill. It is due to the management at
the MOHP suffers from over centralized planning and budgeting, poor financial and information
management, a personnel system too dependent on informal criteria, poor staff motivation and
poor supervising practices.
As a result, there is disparity increasing between urban and rural areas even though more than 75
percent of health institution are distributed in the rural areas. This is due to rugged topography
and distance and low quality of health service. The quality of health service in Nepal is poor due
to inadequately skilled personnel. Hospitals and health centres in rural areas often lack doctors
and nurses and are managed by junior level personnel who have little medical competence. Many
doctors and nurses are reluctant to work in rural areas.
6. REFERENCE
. Ministry of Local Development. Local Self Governance Act1999. Kathmandu: Ministry of
Local Development Nepal, 1999.
Pokharel JC, Regmi SS, Pokhrel U et al. Health Service Decentralization in Nepal. Kathmandu:
Department for International Development Nepal, 2006.
. Ministry of Health, Nepal. Health Sector Strategy: An agenda for reform. Kathmandu: Ministry
of Health, 2004.
Ministry of Health, Nepal. Nepal Health Sector Program Implementation Plan, 2004-2009.
Kathmandu: Ministry of Health, 2004.
R Dhakal,1 S Ratanawijitrasin2 and S Srithamrongsawat3 Addressing the challenges to health
sector decentralization in Nepal: an inquiry into the policy and implementation processes
G Gurung , Nepal health sector decentralization in Limbo: What are the bottlenecks?

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Health sector decentralization in Nepal report

  • 1. 1 | P a g e A Report on Health Sector Decentralization In Nepal A term paper submitted to fulfill the partial requirements of bachelor degree of Public Health (BPH) fifth semester Submitted by Group 8 Batch: BPH 8th Submitted to: Faculty of Public Health School of Health and Allied Sciences Pokhara University May 2018
  • 2. 2 | P a g e Acknowledgement It gives us great pleasure, to present the term paper on the topic “Health Sector Decentralization In Nepal” which will give information about the history , importance present condition of decentralization in Nepal. We would like to express our sincere thanks to the respected subject teacher Dr Damaru Prasad Paneru ,Director , Public Health, Pokhara University who provided valuable suggestions and regular supervision, encouragement, constant inspiration and continuous support for the preparation of this term paper. Surely this term paper would not have seen the light of the day had it not been for unstinting support of our coordinator Mr. Chiranjivi Adhikari and teaching associate. We would like to thanks our senior batch students for sharing their pre-experience knowledge. Lastly, we like to acknowledge all people who are directly/indirectly related to this works and helped us. Finally, we would like to express our gratitude to our respected parents and family members for their blessings, understanding, continuous inspiration and encouragement.
  • 3. 3 | P a g e TABLE OF CONTENT SN Topic Page 1 Introduction 4 2 Objectives 5 3 Methodology 5 4 Finding 1. Conceptof Decentralization 2. Legislation and Its effect 3. Spatial Hierarchy 4. Decentralized Planning 5. DECENTRALIZATION VS. FEDERALISM 6. Problems in Nepal's Health Sector Decentralization 5-16 5 Conclusion 17 6 Reference 18 Group Member 1. Rakshya Sharma 2. Rakshita Lamichhane 3. Nisha Thapa Magar 4. Pragati Sharma 5. Pragya Banstola
  • 4. 4 | P a g e 1.1. Introduction Decentralization means the transfer of power, resources and responsibility from a central authority to the local bodies. Decentralization of power is both horizontal and vertical terms. The process of dispersing decision making governance closer to the people/citizen which includes administrative, political, economic etc is known as decentralization. Decentralization has been an incessant theme in Nepal over the last five decades. It has evolved according to the rationale of successive regimes It ranges from the Rana Rule (pre-1951), for cosmetic purposes, to the Panchayat period (1960-90), to sustain elite power and further, for good governance after the restoration of democracy (post 1990). Some legal initiations which include Local Administration Act (1965), District Development Plan (1974), Decentralization Act (1982), Local Self –governance Act (1999) and etc. have been carried out. Besides, 13 high- level task force /commissions were constituted for decentralization in four decades However, there is centralized government structure as problem which loathes delegating authority .In Nepal, the existing centralized decision-making, planning and budgeting system as well as central control of resources has been considered major constraints in the good governance and decentralization reform process. In this context, the overall administrative system, staffing arrangements and accountability needs to be shifted from a central to local orientation. The resistance from line ministries to devolve resources both financial and staff to local governments has been a major constraint . Weak capacity, structure, excess number and size of local governments are another serious constraint, which needs to be reviewed. The number of local governments in Nepal is unreasonable and too large for effective and efficient planning, administration, coordination, cost efficiency, resource allocation and service delivery
  • 5. 5 | P a g e 2. Objective  To review the concept of decentralization, and analyze legislation process and its impacts in health service delivery particularly in Nepal.  To describe the problems arising in decentralization in health sector in Nepal 3. Methodology Division of work among the group members , group discussion was upmost . This study adopted qualitative methods. For this secondary data/ information were generated and utilized. Secondary information was collected from sources such as Nepal's government's appropriate documents, office records of relevant offices, published and unpublished information by various individuals and the institutions. Keywords were identified and information was searched as per it Keywords Site Result Article taken Decentralization and health sector in nepal Google 450,000 3 “National health policy 1991” Google 162,000,000 1 National health sector strategy nepal Google 9,270,000 1 Second long term health plan Google 400,000,000 1 Local self governance act nepal Google 2,140,000 1 4. Findings 4.1. Concept of Decentralization Decentralization is widely believed that it increases possibilities for participation of all stakeholders; people would be empowered to manage their affairs; people shoulders responsibilities and feel ownership; and there would be a more efficient provision of public goods and services for the people in general and the poor in particular. Therefore, Government of Nepal (GON) emphasizes on decentralization to devolve power in order to provide health service at door steps of people.
  • 6. 6 | P a g e Conceptually, decentralization within the state involves a transfer of authority to perform some service to the public from an individual or an agency in central government to some other individual or agency which is closer to the public to be served . The transfer of authority can be done two ways: territorial and functional. The basis of transfer of territorial authority is placed at the lower level of territorial hierarchy where service providers and clients are geographically closer. Similarly, the authority transfer can also be made functionally. There are three types of such transfer of authority  within formal political structure  within public administrative or parastatal structure  from an institution of the state to a non-state agency Expected benefits of the decentralization are assumed as it would  Promote local democracy  Mobilization of people’s participation politically  From Administrative view points, it improves administrative efficiency  Make government quickly respond to the needs and aspirations of the peoples.  Enhance the quantity and quality of services, government provides to the people.  From development view point, it lead better decision-making and greater efficiency and effectiveness on locally specific plans, inter-organizational coordination, motivation of field level workers.
  • 7. 7 | P a g e However, these proposition of decentralization’ benefits seem from normative stance. It can be argued that the possibilities of cost and risk of decentralization viz: loss of high scale of economies and generation of duplication and unemployment of staff and equipment. It can create coordination problem among inter- or intra- organizations within the state. Due to lack of resource, there might be institutional constraints that can hardly cope with the need and aspiration of the people. The possibility of disintegration of state also can be denied in decentralization process. In practice too, the challenges of good governance through decentralization are many. In most developing countries, there has been tendency for independent governments to prefer delegating power within the public service [deconcentration] rather than to locally elected authorities [devolution]. There has been much rhetoric about participation and local autonomy, but central governments have jealously guarded their power. 4.2. Legislation and Its effect Case of Nepal, GON has introduced one of the world's most progressive legislation for decentralization in the world devolving primary responsibility for local development to elected local authorities. While the Local Self-governance Act (LSGA) mandates local government bodies to manage and supervise sub or Health Post (S/HP) and their functioning, local committees and Village Development Committee (VDC) and bodies like Health Management Committee (HMC) should control resources and management of S/HP. Another discrepancy is the allocation of responsibilities without any provision for the required resources. These differences in rules and regulations between LGSA, 10th Plan and Ministry of Health and Population (MOHP) guidelines and the role of local bodies (VDCs, and District Development Committees-DDCs) are a major concern for enhanced community ownerships of S/HPs. Currently VDCs receive central government grant of which 25% are earmarked for social services including health. In addition, VDCs can generate additional resources to cover the services. No extra central government funds accompany the new arrangements under SHP handover. While the committees have the responsibilities to oversee and monitor the functioning of health staff, they have no responsibilities for their hiring and firing, which remains under the MOHP. The chair of the SHP health committee is the VDC chairman when in post. In the current climate the chairman is the VDC secretary. The guidelines state that the committee must have four women as members and two candidates have to represent the dalit/Janajati community. The Decentralization Act of 1982 and respective by-laws of 1984 were milestones in accelerating decentralization in Nepal. Later, the statutory framework for decentralization and local governments was defined by the LSGA, 1999 and the Local Self-Governance Regulation, 2000.10 In addition, a number of other policy initiatives also had a significant bearing on the overall reform framework for decentralization, inter alias: the High Level Decentralization Implementation Monitoring Committee, Local Bodies Fiscal Commission (LBFC) and the Sector Devolution Guidelines. Key reform measures in the health service include: the Health Policy, 1991, Second Long Term Health Plan (SLTHP,1997),
  • 8. 8 | P a g e Nepal Health Sector Programme – Implementation Plan (NHSP-IP, 2004),13 successive annual work program and budget (AWPB). MOHP’s decentralization policy directives focused only on the handover of health facilities to Health Management Committees (HMCs) and assigned responsibilities to manage local health facilities and prepare and implement health programs . In 2002, the Ministry of Health realized the weaknesses in the previous policies and the need for a more radical reform measure to overcome systemic problems for improved service delivery. With this vision, the Health Sector Strategy (HSS): An Agenda for Reform15 and subsequently, the Nepal Health Sector Program Implementation Plan (NHSP-IP), 2004 were developed. The HSS and NHSP- IP set key reform measures and actions. The focus of the reform was to establish appropriate structures at different levels, strengthen sector management, and improve service delivery through deconcentration . The Table-1 below presents implementation status in brief on the proposed measures. Policy reform Proposed policy actions/instruments Implementation status* Endorsement of management model for decentralization Strategy for decentralization approved by 2004; Management functions delegated to regional level by 2006/07; Decentralization model implemented by 2006/07 Strategy was approved by cabinet in 2006. However, due to lack of costed plan and commitment from government the strategy never received adequate support Restructuring of MOH MOH restructured by 2005/06; Human Resources Development (HRD) policy finalized by 2005/06; District based planning, budgeting and performance management system developed by 2005/06; Joint planning system strengthened New HRD and financial management division established without clear policy on HRD; No initiative in preparing district plan; Joint Annual Review of government and donors partially addressed the planning issues Capacity Development Carryout horizontal, vertical and internal analysis and agree on the division of labor and functions; Capacity building program designed & implemented MOHP commissioned the study but the findings were not operationalized; Lack of complete package of capacity measures for implementation Management of health facilities by Health Health facility (HFs) handover to local HMC in all 75 districts; Only 1433 HFs of 28 districts handed over to HMCs;
  • 9. 9 | P a g e 4.2.1. National Health policy 1991AD • Regionalization and decentralization processes will be strengthened. Peripheral health units will be made more autonomous and effective • Of the various organizations providing health services at different levels, the district health organizations will be given a most prominent role. • Arrangements will be made for local level planning and management of curative and promotive health services, with priority given to preventive health services, from the district to the village level • Micro planning procedures will be adopted in formulation of primary health plans at the village level under which health services will be provided to all target groups with special efforts to reach the underprivileged group. 4.2.2. SLTHP (1997-2017AD) • Equitable access to quality health services in rural and urban areas • Health services are characterized:  self reliance,  full community participation  decentralization  gender sensitivity  effective and efficient management  improve inter-and intra-sectoral co-ordination and to provide the necessary conditions and support for effective decentralisation with full community participation. Management Committees (HMCs) 10% of health spending born by elected local bodies (LBs) by 2006/07; HMCs design the service packages Health sector did not get proposed funding level; Lack of capacity among HMCs could not design the service package Inter-sectoral coordination Coordination with key line ministries established; Mechanism of coordination with donor partners to support district level delivery within a sector-wide approach Lack of functional coordination mechanism; Donor coordination at district level issues are yet to be addressed Provision of essential health care services Prioritized services delivered by all health facilities; Quality criteria developed and implemented Limited range of services available; Quality criteria available but not practiced
  • 10. 10 | P a g e 4.2.3. Health Sector Strategy (2003/4) • NHSS prioritizes the implementation of the “Collaborative Framework for Strengthening Local Health Governance in Nepal”. • As outlined in the Framework this initiative strengthens overall local health governance, transparency, accountability and responsiveness. • It promotes participatory development and prioritizes health within the local development agenda. • This initiative attempts to redefine the roles and responsibilities of collaborating partners, leading to a new stewardship role of the MoHP at central level and more evidence-based local planning and decision-making at district, municipality and VDC levels. • The introduction of more decentralized planning and resource allocation is accompanied by further introduction of flexible health grants through the District Development Fund • NHSS imparts necessary authority to the regional health structure to ensure sufficient linkages between the district and national levels in terms of local health planning and budgeting processes • It also recognizes the important role of the regional level to continuously monitor the equitable delivery of quality health services at sub-national levels. 4.2.4. Interim Constitution of Nepal 2007AD Health as fundamental human right and service delivery through decentralized manner. NHSP II include the local health governance as a core output. 4.2.5. Collaborative framework between MoHP and MoFALD Collaboration between MoHP and Ministry of Federal Affairs and Local Development (MoFALD) at different level was based on win- win approach. It is a milestone for strengthening participatory development and local governance in the long run Shared Vision Strengthen and institutionalize local health governance to efficiently improve access to and coverage of quality health services focusing to poor and marginalized groups in particular, through participatory local governance framework. Objective Improve health service management by  Advocating health as prioritized local development agenda
  • 11. 11 | P a g e  Partnering with community organization under the umbrella of local bodies  Strengthened local accountability and ownership  Participatory planning and management Agree Principle  Strengthening local governance and local health system  Adapting multi-sectoral approach for better health outcomes  Advocating health as a broader local development agenda  Improving responsiveness, local leadership and ownership  Emphasizing community empowerment, participation and accountability. 4.3. Spatial Hierarchy In Nepal, the territorial units within a country divided into fourteen zones, 75 districts and more 4000 village development committees and a number of municipalities for the political and administrative purpose in 1963. The zonal level was created basically for political purpose to filter political representation to the Rastriya Panchayat (National Assembly) and for security surveillance. The districts were assigned administrative and development functions, which later (1965-70) were considered the basis of decentralization. In 1972, the country was divided into four development regions and later (1978) into five. Since the formation of development regions in 1972, various ministries established their regional offices/directorates at the designated regional centres with dismantling of department of the various sectoral ministries. There are five health regional directorates. These offices act as pool between the central and district health office. These offices collect the monthly report from districts and zonal offices and reports periodically to the Ministry. Later on, these regional directorates are kept under the Department of Health Service (DOHS) which was revived after the restoration of democracy. These regional health offices are not under the control of regional administrative offices but accountable to the respective central offices. It made regional level as superfluous hierarchy. After the restoration of democracy, zonal administration was abolished as a vestige of autocratic regime. But, there are ten zonal hospitals in the country. These zonal hospitals were established under the developmental act (2059 BS). These hospitals are directly accountable toward Ministry, not regional health directorate or regional administration. Zonal and regional administrators have been appointed recently due to security reasons not development concern. These regional and zonal offices have no right to monitor, supervise and giving feedback to regional service delivery offices e.g health offices. The underlined reason is that there was not adequate delegation of authority whereby these regional offices became redundant hierarchy between central and district level. Besides, the applications of regional perspective in Nepalese development are the highly centralized system of governance and the primacy of sectoral approach.
  • 12. 12 | P a g e 4.4. Decentralized Planning The decentralized planning process emphasizes to ensure active people’s participation in local development process aimed at enhancing the production of goods and services for the promotion of the welfare of the local people in general and rural poor in particular . It makes the people focal point for entire development activities and goods and services. Similarly, it mobilized the public, private, corporate bodies and social and NGOs sectors for accelerating development process at local level. So far decentralized health planning is concerned; health service delivery is arranged along sectoral line agencies and local health organization. Ministry of Health and Population (MOHP) and its departments along with other private and NGOs cover health sector. Generally they follow directives and targets set by national development policy and plans. But the ministry and department have their own policy and programme. There is virtually a weak mechanism for feeding the concerns of the local communities into the planning process, because the planning levels are physically and institutionally far from local people. However, this necessarily does not mean that there no integration of planning efforts across different sectors, but integration often takes place at higher levels where the decisions are made on the allocation of resources.
  • 13. 13 | P a g e At the implementation level, there is little integration among the line agencies. Some integration appears where the extension services are multipurpose and cover wide range of areas, but planning and intervention of programme are generally carried out by each separate technical team recruited by Central government in accordance with what they consider to be priorities for their sector . According to UNFPA, the management at the MOHP suffers from over centralized planning and budgeting, poor financial and information management, a personnel system too dependent on informal criteria, poor staff motivation and poor supervising practices. Furthermore, there is lack of "objective" evaluation. In case of health service, problems are underreported and achievements over reported (UNFPA: 1989). A lack of trained staff to do policy analysis is a further problem It appears that one problem reinforces the other problems, and that for example the absence of specification and appropriate planning is aggravated by incorrect information. 4.5. DECENTRALIZATION VS. FEDERALISM On 28 May 2008 the Constituent Assembly declared Nepal as Federal Democratic Republic. One of the important questions on the current decentralization policy is whether the policy is still relevant and does it fits to the new federal structure or not? Federally constituted states can be highly centralized and states constituted in a unitary fashion can be highly decentralized. The two terms federation and decentralization deal, hence, with different levels of decision making: federation refers to a trait in the constitutional level whereas the term decentralization describes a policy choice on the post-constitutional one. This implies that a federal structure can be used to implement a decentralization policy, the two are thus not mutually exclusive. But it also means that a federal structure is not a necessary condition to implement decentralization policies.
  • 14. 14 | P a g e Federal Province Federal Super specialized Hospital Municipal Hospital and Municipal Health Office Provincial Referral Hospital / teaching Hospital PHCC Village / community health office Urban Health Promotion Centre Hospital ,PHC,HP, CHU, PHCORC Community Health Center Local Health Services Organizations in Federal Context
  • 15. 15 | P a g e 4.6. Problems in Nepal's Health Sector Decentralization 4.6.1. Lack of clear-cut policy To effectively manage handed over HFs under decentralized setting, it requires clear cut directives from the central level regarding the authority delegated at various levels, and the scope of work assigned to various concerned bodies such as MoHP, Department of Health Service (DoHS), DDCs, VDCs, HFs and HFOMCs themselves. Although the process of handing over HFs started in 2000, the roles and responsibilities are not yet clear. Within the MoHP, the exact roles of different divisions and centers are unclear. Other key partners and stakeholders such as the Ministry of Local Development (MoLD), DDCs, DPHOs, HFs, VDCs and supporting partners, are also in a state of confusion with regards to their respective roles and authority. For example, DPHO assume that the DDC is more responsible for the management of handed over facilities and vice versa. DDC authorities, including the DDC Chairman and Local Development Officer (LDO) are busy with other responsibilities and as such, the management of HFs is not a priority. Furthermore, it is important to mention here that health staff under the devolved districts has dual loyalties. For example LDO has supervisory authority over health staff on day to day issues like vacation, travel etc. but broader aspects of personal management like performance appraisals, promotions and deputations are still handled by health ministries . The above situations are the result of a lack of clear cut policy directives from the centre. Therefore, amendment of such contradictory and ill defined policies is essential. 4.6.2. Lack of coordination among different sectors: To manage the HFs that have been handed-over properly, there is an urgent need for coordination between the Ministries and intra-ministerial divisions at MoHP, DoHS, the centre and districts, DDCs and DPHOs, DDCs and VDCs, DPHOs and HFs, HFOMCs and HFs, HFOMCs and communities, etc. Coordination among these stakeholders- at both vertical and horizontal levels- has remained weak. In many cases, disputes have occurred due to a lack of understanding and coordination among various stakeholders. 4.6.3. Handover process not conducted properly The handover process of the HFs to HFOMCs was carried out in haste and without any preparation. For example, in some cases, VDCs received a fifteen day notice that HFs would be handed over to the community. As such, when the DDCs invited the community for the handover ceremony, HF in-charges themselves were not aware it was happening. Orientation sessions are needed to better prepare and sensitize not just the community, but all concerned actors, about the handover process. 4.6.4. Lack of coherence on capacity building of local bodies: Merely ensuring the handover process was properly carried out, however, was not sufficient. The capacity building of HFOMCs was deemed necessary, which many organizations in the past few
  • 16. 16 | P a g e years have been actively involved in, albeit with their own schools of thought on the process and content. Initially, capacity building of HFOMCs was not thought of as a process, rather, it was being equated to a one-time event or training and was given low priority with regards to follow- up, monitoring, coaching and periodic review. Moreover, the training component was not smoothly conducted, being more knowledge-based instead of a mix of knowledge and skills. In addition, since handover and orientation was not properly or adequately carried out, HFOMC member’s level of knowledge and skills on health facility management was poor. Most members were not aware of their roles and responsibilities. These are the main reasons why despite long engagement of a large number of organizations, strengthening of HFOMCs did not make headway. A complete capacity building package is needed, where the training component is only one element among many. Therefore until and unless there is capacity within local bodies to bear the devolved authorities and responsibilities, backed by consolidated and effective capacity building measures, health sector decentralization won’t achieve its desired objectives. 4.6.5. Lack of electedlocal Bodies: Lack of elected bodies at the VDC level is another key reason why decentralization is not making expected progress. As per the present strategy, the chairman of the VDCs is to chair the HFOMCs. In reality however, in the absence of a locally elected body, the VDC secretaries are currently chairing them. VDC secretaries seldom go to the village, preferring instead to remain at the district headquarters. Lack of security is one of the reasons cited why they don’t prefer to go the duty station. 4.6.6. Federalism and state restructuring process in Nepal As a result of recent political development, Nepal has become a Federal Democratic Republic and the country is in the process of political restructuring. Due to this development, there is confusion on how the decentralization process is to move ahead, including its relevance when such structural changes happen. In fact the difference between a unitary and a federal state is not that one is more decentralized than the other, but that the former can be decentralized through legislation whereas the latter is decentralized by constitution. Federally constituted states can be highly centralized and states constituted in a unitary fashion can be highly decentralized. Since there is still political debate and dialogue regarding modality of state restructuring including federalism, it has major implications on the further progress of health sector decentralization at both policy and operational levels, directly and indirectly. 4.6.7. Health sector financing, human resource policy and capacity issues The budget process was more of an input-based (facilities and beds rather than e.g. disease burden). The per capita expenditure by Government in health has increased from five US dollars in 2004/05 to eight in 2007/08. Similarly, the proportion of health sector budget out of the total national budget has increased. However, poor financial performance caused by rigid financial procedures and lack of timely disbursements of budget in the public sector has created an
  • 17. 17 | P a g e imbalance between allocation and expenditure. Though, gradual improvement in this area has been observed since 2004/05. Lack of a decentralized human resource policy is one of the critical issues in the overall management of human resources in Nepal’s public health system. The country experiences of Mexico, Ghana, Indonesia and South Africa show mixed results in terms of human resource management at decentralized levels.27 It has been cautioned that without a comprehensive human resource policy addressing skills, staff equity, staff motivation and performance under decentralization at different levels any attempt to decentralize human resources is unlikely to succeed. The hesitation and unwillingness of the health personnel to work under the local government shows clear resistance from the side of civil servants which might have unforeseeable implications for future policy decisions. However, the reason for unwillingness might partly be due to the timing of decentralization, political conflict, and absence of legitimate committees. As neither DDC nor VDC representatives would have decision making authorities in terms of management, handing over of health facilities to local government would create further confusion and delay in implementation. 5. Conclusion Decentralization was taken as a convenient tool to reinforce respective regime’s political power in spite of incessant theme in Nepal over last five decades. Some legal initiations for the decentralization were also made. At present, LGSA is in the operation. It mandates local government bodies to manage and supervise S/HP in order to deliver health service effectively including other developmental activities. However, there is mismatch between the allocation of responsibilities and the provision of required resources. There are contradictory rules and regulations between LGSA, 10th plan and MOHP guidelines and the role of local bodies. As a result, the jurisdictions of the local bodies and the line agencies overlap. Local bodies can not influence the decision-making of line agencies. GON has constituted regional development office to facilitate and support the local level so that people would not come to central level. In this line, five health regional directorates were established. Similarly, zonal offices also established with the aim to monitor, supervise and giving feedback to the local health offices. However, these zonal and regional health offices became redundant between central and district level. It is because that there was not adequate delegation of authority to regional and zonal office. These offices can not do anything except collecting monthly reports. The applications of regional perspective in Nepalese development are the highly centralized system of governance and the primacy of sectoral approach. Decentralized health planning seems only in name but not in function because the planning levels are physically and institutionally far from the local people. Local people hardly know the information about the planning mechanism of health The health service sector is target based where the target is passed down from the top i.e. from the National Planning commission to Ministry level to the local level. Generally, local health organization follows directives and target set by national development plans and policy. But the
  • 18. 18 | P a g e ministry and department have their own policy and programme. But, very often the target given to the local levels is unrealistically high and impossible to fulfill. It is due to the management at the MOHP suffers from over centralized planning and budgeting, poor financial and information management, a personnel system too dependent on informal criteria, poor staff motivation and poor supervising practices. As a result, there is disparity increasing between urban and rural areas even though more than 75 percent of health institution are distributed in the rural areas. This is due to rugged topography and distance and low quality of health service. The quality of health service in Nepal is poor due to inadequately skilled personnel. Hospitals and health centres in rural areas often lack doctors and nurses and are managed by junior level personnel who have little medical competence. Many doctors and nurses are reluctant to work in rural areas. 6. REFERENCE . Ministry of Local Development. Local Self Governance Act1999. Kathmandu: Ministry of Local Development Nepal, 1999. Pokharel JC, Regmi SS, Pokhrel U et al. Health Service Decentralization in Nepal. Kathmandu: Department for International Development Nepal, 2006. . Ministry of Health, Nepal. Health Sector Strategy: An agenda for reform. Kathmandu: Ministry of Health, 2004. Ministry of Health, Nepal. Nepal Health Sector Program Implementation Plan, 2004-2009. Kathmandu: Ministry of Health, 2004. R Dhakal,1 S Ratanawijitrasin2 and S Srithamrongsawat3 Addressing the challenges to health sector decentralization in Nepal: an inquiry into the policy and implementation processes G Gurung , Nepal health sector decentralization in Limbo: What are the bottlenecks?