The State of Health Financing in Nepal
Every year as the national budget approaches, Nepal’s healthcare community braces with a mixture of hope and apprehension. For decades, the pattern has been consistent: health receives between 5–7% of total government expenditure—far below the Abuja Declaration target of 15%—while the disease burden, aging population, and expectations continue to grow.
As someone who has spent over fifteen years in both clinical practice and healthcare leadership, I have witnessed the direct consequences of this chronic underinvestment. Patients who cannot afford medications. Hospitals without functioning equipment. Doctors and nurses leaving for better opportunities abroad at an alarming rate.
Investment vs. Expenditure: The Critical Distinction
There is a profound conceptual difference between viewing healthcare spending as investment versus expenditure. Expenditure is transactional—it keeps current services running. Investment is transformational—it builds capacity, prevents disease, and generates economic returns.
According to WHO estimates, every $1 invested in preventive healthcare and health promotion yields $4–7 in economic returns through reduced disease burden, increased productivity, and lower long-term treatment costs. Nepal’s current approach—heavily weighted toward curative care with minimal investment in prevention, primary care infrastructure, and health workforce development—locks us in a cycle of reactive spending.
Where Nepal’s Health Budget Falls Short
An analysis of recent health budget allocations reveals several structural problems:
1. Skewed toward hospital care: Over 60% of health allocations go toward tertiary hospitals, while the primary healthcare network—which serves 70% of Nepal’s rural population—receives a fraction of this. NAMS and Bir Hospital receive significant funding, but village health posts remain critically understaffed and undersupplied.
2. Insufficient investment in the health workforce: The doctor-to-population ratio in Nepal stands at approximately 0.7 per 1,000—far below WHO’s recommended minimum of 1 per 1,000. Yet budget allocations for medical education infrastructure, faculty development, and specialist training remain inadequate.
3. Weak preventive care spending: Non-communicable diseases (NCDs)—hypertension, diabetes, cancer, COPD—now account for over 60% of Nepal’s disease burden. Yet NCD prevention programs receive a disproportionately small share of the budget compared to their health impact.
The NAMS Expansion: A Case Study in Strategic Investment
The “Expanded NAMS” vision I have championed since becoming Rector represents precisely the kind of strategic investment Nepal needs. By establishing NAMS campuses in each province—training specialists closer to where they are needed—we address both the specialist shortage and the geographic inequity in healthcare access simultaneously.
This is not expenditure. It is infrastructure investment with decades-long returns.
What a Transformative Health Budget Would Look Like
Based on my experience and international evidence, a health budget that truly invests in Nepal’s future would:
- Reach 10% of total government spending by 2027, with a clear roadmap to 15% by 2030.
- Allocate 30% to primary care and prevention, with specific line items for NCD screening programs, maternal and child health, and rural health infrastructure.
- Establish a dedicated health workforce development fund to increase faculty at medical institutions, improve specialist incentives in underserved areas, and fund international fellowship programs.
- Create a national health insurance implementation fund to accelerate the rollout of Rastriya Swasthya Bima Karyakram.
Conclusion
Healthcare spending is only “expenditure” if we approach it without strategy or vision. Approached correctly—with evidence-based allocation, long-term thinking, and commitment to equity—it is among the highest-return investments any government can make.
Nepal’s leaders have an opportunity with each budget cycle to shift this paradigm. The question is whether they have the political will to seize it.
