More than three decades after the release of the Rockefeller Foundation’s Bellagio Conference report, Good Health at Low Cost , Sri Lanka continues to report impressive health indicators. It has the lowest maternal mortality ratio in the South Asian region: 30 maternal deaths per 100,000 live births in 2015, as compared with Bangladesh (176), India (174), Maldives (68), Nepal (258) and Pakistan (178) . In addition, Sri Lanka has achieved elimination status in the control of several intractable communicable diseases, including poliomyelitis, malaria, and, most recently, measles [3,4,5]. In 2018, WHO celebrated World Health Day in Colombo, marking the country’s accomplishments in healthcare coverage .
Sri Lanka’s acclaimed publicly financed and delivered “free” healthcare system is widely acknowledged as a critical factor underlying its health achievements [6,7,8]. Guided by a “Free Health” policy (1951) adopted following independence, the public healthcare system comprises state-financed and administered healthcare facilities that remain free of charge at the point of use, covering about 50% of outpatient services, 90% of inpatient admissions, and nearly all preventive services. Financing has remained tax-based within the public system, with no separation of purchasing and provision [6, 8]. In fact, a 2018 World Bank-commissioned study highlighted the country’s rejection of orthodox health-financing reforms .
On the other hand, a fast-growing private health sector flourishes in parallel to the public system, accounting for over half of national health expenditures, much higher than its contribution to actual healthcare delivery. In 2015, 54% of health spending came from private sources: 85% of this paid out-of-pocket, 5–8% comprised employer benefits, 5% health insurance, and 2–3% from the non-profit sector . Despite 40 to 45% of total health spending being financed out-of-pocket, catastrophic and impoverishing health expenditures have remained comparatively low because the public system still covers the bulk of (more expensive) inpatient care [6, 10].
The ever-expanding for-profit private sector fills a critical gap in public-sector ambulatory services. As state investment in the public system is grossly inadequate to address the demand for health services, users are compelled to pay out-of-pocket for services from the private sector. With an escalating burden of non-communicable diseases (NCD), and a rapidly aging population, the burden of out-of-pocket expenses is expected to rise further [11, 12]. In October 2018, the Ministry of Health adopted a new policy, “Healthcare Delivery for Universal Health Coverage” , setting out expansive healthcare reforms to improve population coverage, financial risk protection, and service comprehensiveness. Reforms aimed at streamlining health-service delivery in the public sector include plans for contracting-in private providers to improve healthcare coverage. As Sri Lanka now embarks on reforming its long-acclaimed “free” healthcare system, this article questions public financing of private delivery as a path to achieving UHC.Footnote1