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Reforming Bhutan's Health Sector

The health of Bhutan's population will be improved through a loan of SDR 7,614,000 (about US$10 million equivalent) approved today by the Asian Development Bank. The Health Care Reform Program includes major policy measures to strengthen the financing, management and regulatory framework of the health sector.

Huge gains have been made by the Government since the 1980s to improve the health of its citizens in the small, land-locked Himalayan country. Life expectancy rose from 48 in 1984 to 66 by 1994 with a marked improvement in infant and under-five mortality rates. But much remains to be done to strengthen the effectiveness of various health programs which will be facilitated by the implementation of significant policy reforms for the health sector.

The program will help the Government explore innovative and sustainable ways of financing the health sector and reduce dependence on external assistance. At the same time, however, the program will specifically address the primary health care needs of vulnerable groups, including women and children. The Bhutan Health Trust Fund will be established to help ensure long-term sustainable financing of vaccines and essential drugs.

The program will also strengthen capacity in health sector management, improve quality assurance and public health regulatory functions; adjust imbalances in human resources for health; and enhance primary health care through selective interventions and by expanding priority services.

The program will cover the five years from fiscal year 2001-fiscal year 2005. The ADB loan will come from its concessionary Asian Development Fund. The loan will have a repayment period of 24 years, including an 8-year grace period. An interest rate of one percent will be charged per annum during the grace period and 1.5 percent per annum thereafter.

The Ministry of Health and Education is the executing agency.

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