<p data-start="70" data-end="1186">The report <em data-start="81" data-end="142">"Budget Execution in Health: From Bottlenecks to Solutions"</em>, jointly published by the World Health Organization (WHO) and the World Bank, sheds light on the persistent inefficiencies in health budget execution across low- and middle-income countries (LMICs). Conducted by researchers from WHO’s Department of Health Financing and Economics and the World Bank’s Health, Nutrition, and Population Global Practice, the study explores how poor budget execution undermines healthcare delivery and limits progress toward Universal Health Coverage (UHC). While much effort has been dedicated to advocating for higher health budget allocations, the way these funds are spent has received far less attention. Effective budget execution is critical for ensuring that resources are allocated efficiently to pay healthcare workers, procure essential medicines, and maintain infrastructure. However, delays in fund disbursement, inefficient financial controls, and procurement bottlenecks leave many health systems unable to meet the needs of their populations, leading to service disruptions and resource wastage.</p><h3 data-start="1188" data-end="1246"><strong data-start="1192" data-end="1244">A Global Pattern of Underutilized Health Budgets</strong></h3><p data-start="1248" data-end="2558">One of the most striking findings of the report is the widespread under-execution of health budgets in LMICs. On average, LICs underspend their allocated health budgets by 13%, leading to an annual loss of approximately $4 per capita, an amount comparable to what many nations allocate to primary healthcare services. Underspending is particularly severe in sub-Saharan Africa and the Eastern Mediterranean region, where execution rates average just 87%. These low execution rates have deteriorated over time, with LICs experiencing a decline of 1.6 percentage points per year between 2010 and 2020. Another major challenge is year-on-year volatility, with some countries experiencing fluctuations of up to 20 percentage points, making it difficult to implement long-term health strategies. Interestingly, some upper-middle-income countries (UMICs) face the opposite problem—overspending—raising concerns about weak financial oversight and mismanagement. The report also finds that compared to other social sectors, health budget execution lags behind education, with execution rates in LICs averaging 7 percentage points lower. The most under-executed portion of health budgets is the goods and services category, which covers essential medical supplies, while wages and salaries are usually fully executed.</p><h3 data-start="2560" data-end="2620"><strong data-start="2564" data-end="2618">The Roadblocks: Why Health Budgets Fail to Deliver</strong></h3><p data-start="2622" data-end="3845">The study categorizes budget execution bottlenecks into three key areas: formulation, execution, and oversight. Budget formulation issues arise from unrealistic revenue projections, weak budget credibility, and reliance on outdated budgeting practices. Many health ministries lack the technical expertise to develop accurate cost estimates, leading to a mismatch between allocated funds and actual healthcare needs. Furthermore, rigid budget structures make it difficult to adjust spending in response to changing health priorities. Challenges in budget execution include unpredictable cash flows, delays in fund disbursement, and excessive bureaucratic controls. In many countries, cash rationing—where funds are released based on availability rather than approved budgets—leads to severe service disruptions. Procurement inefficiencies further complicate execution, with long and complex processes delaying the acquisition of medical supplies and essential drugs. At the oversight level, weak financial monitoring and fragmented reporting systems hinder accountability. Many LMICs lack integrated financial management information systems (FMIS), making it difficult to track spending and assess efficiency in real-time.</p><h3 data-start="3847" data-end="3916"><strong data-start="3851" data-end="3914">A Four-Step Solution: Diagnosing and Fixing Budget Failures</strong></h3><p data-start="3918" data-end="5057">To help countries overcome these challenges, the report proposes a structured four-step diagnostic approach to improving health budget execution. The first step involves mapping funding flows and reviewing public financial management (PFM) rules to understand how funds are allocated, disbursed, and controlled. The second step focuses on assessing health budget execution performance by calculating budget execution rates and analyzing spending patterns to identify areas of underspending or overspending. The third step involves systematically identifying the root causes of budget execution failures by examining issues at each stage of the budget cycle. For example, if a country consistently struggles with underspending, the cause could be rigid budget structures, slow procurement processes, or delays in cash releases. Finally, the fourth step entails developing and implementing policy solutions tailored to the specific challenges identified. These solutions may include streamlining cash flow management, allowing greater flexibility in budget structures, strengthening procurement systems, and enhancing financial monitoring.</p><h3 data-start="5059" data-end="5129"><strong data-start="5063" data-end="5127">Unlocking the Potential: Policy Reforms for Better Execution</strong></h3><p data-start="5131" data-end="6443">Governments must take decisive action to improve health budget execution. Finance ministries should prioritize strengthening cash management practices to ensure timely fund disbursement, adopting program-based budgeting (PBB) to allow for greater flexibility, and designing risk-based spending controls that differentiate between high- and low-value transactions. Health ministries should focus on improving budgeting capacity by developing more accurate cost estimates, advocating for more adaptable budgetary rules, and ensuring that funds are allocated to priority health programs. Local governments, especially in decentralized health systems, should ensure that intergovernmental transfers are predictable and sufficient to meet local health service delivery needs. Procurement processes also require urgent reform, with governments encouraged to invest in e-procurement systems to enhance transparency and efficiency while delegating procurement authority closer to service providers. Allowing health facilities to procure basic medical supplies directly can improve execution rates and prevent stock shortages. Additionally, financial monitoring and accountability mechanisms should be strengthened to ensure that budget allocations translate into tangible improvements in healthcare access and quality.</p><p data-start="6445" data-end="7661" data-is-last-node="" data-is-only-node="">The report underscores that health budget execution is not merely a technical issue but a fundamental governance challenge that requires collaboration between finance, health, and local government authorities. Effective budget execution is essential for strengthening health systems and achieving UHC. Countries that can execute their health budgets well are in a stronger position to advocate for increased health funding in the future. The findings call for a shift in focus from merely increasing health budgets to ensuring that allocated funds are fully utilized and effectively spent. Greater transparency in expenditure data, improved financial management systems, and proactive dialogue between ministries of finance and health are crucial for overcoming budget execution challenges. By implementing the recommended policy actions and diagnostic approach, LMICs can unlock the full potential of their health budgets, ensuring that every dollar invested translates into real improvements in healthcare access and quality. The WHO and World Bank emphasize that improving health budget execution should be a top priority for governments seeking to strengthen their health systems and advance progress toward UHC.</p>
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