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Abstract
This article examines the healthcare crisis in Sri Lanka, which has been exacerbated by the country’s economic downturn in 2022. Prior to the crisis, Sri Lanka had enjoyed a robust healthcare system and good health indicators. However, the current situation has led to shortages of essential medicines and medical devices, as well as a rise in out-of-pocket expenditures (OOPE) for healthcare. The article analyzes the root causes of the high OOPE, including inadequate public financing, inefficiencies in the healthcare system, and the lack of a national health insurance scheme. It also discusses the potential social and geopolitical implications of a strained healthcare system in Sri Lanka, such as the erosion of trust in the government, challenges in economic cooperation, and the potential for regional instability. The article concludes by suggesting potential solutions, including improving healthcare financing, implementing healthcare technology assessment, and fostering international cooperation to address the crisis. Addressing the healthcare challenges in Sri Lanka is crucial not only for the well-being of its population but also for regional peace and stability.
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For years, Sri Lanka has prided itself on its robust healthcare system, boasting commendable health indices across all demographics and achieving numerous sustainable developmental goals (SDG).[1] However, the rising inflation and economic downturn in 2022 significantly impacted the delivery of effective healthcare in many developing countries, including Sri Lanka, previously depicted as a low-cost, high-efficacy model of quality healthcare.[2] The breakdown of healthcare service standards can trigger conflict, crime, and illegal migration, with global repercussions. Such breakdowns may contribute to geopolitical rifts in the Indo-Pacific region. Therefore, in 2024, we aim to discuss the magnitude of this issue and explore practical approaches to resolving the shortfall.
Health facilities, predominantly provided by the government sector, are largely free of charge and funded by taxes. Despite this, Sri Lanka’s current health expenditure as a percentage of GDP has remained less than 4% over the past decade. In recent years, Sri Lanka has witnessed escalating out-of-pocket payments, primarily driven by rising private contributions.[3] Universal health coverage (UHC) stands as the goal for all healthcare systems. The World Health Organization defines UHC as ensuring that all people obtain necessary health services without facing financial hardship. Monitoring progress toward UHC focuses on the proportion of the population accessing essential quality health services and the proportion spending a large portion of household income on health.
In healthcare financing, there is no one-size-fits-all strategy. Hybrid financing models often prevail, and a country must adopt the most suitable healthcare financing strategy to achieve UHC given its resources. Education and health are recognized as investments with high returns, as they enhance both the quantity and quality of human capital. Consequently, the Sri Lankan government continues to provide these services universally and free of charge.
According to the Central Bank of Sri Lanka, headline inflation for 2022 surged to 69.8 percent, with a relatively lower inflation rate of 30.7 percent observed in the “health” subcategory.[4] The government of Sri Lanka, through gazette notifications, found it necessary to increase the prices of essential medicines by 40 percent in April, followed by another escalation for medical devices in September 2022.
For instance, considering the antibiotic Co-amoxiclav (625 mg tab) as an illustration of medication, the maximum retail price gazetted in 2019 stood at Rs 72.07, which soared to Rs 141.86 in April 2002, marking a staggering 97-percent increase.[5] Similarly, examining coronary drug-eluting stents as essential medical devices, the price in September 2022 reached Rs. 236,224.80. Contrastingly, the maximum retail price was gazetted at Rs 168,732 in March 2022, Rs. 130,800.00 in August 2021, and Rs. 120,000.00 in March 2019 (pre-pandemic), indicating a 97-percent increase compared to the pre-pandemic level.[6] This imparts substantial constraints in a country that has a high risk of conditions such as heart failure post myocardial infarction at a young age.[7]
The impact of these price hikes has been acutely felt by patients across numerous healthcare institutions, resulting in high out-of-pocket expenditure (OOPE) due to service shortages and the unavailability of essential or life-saving medications. Additionally, dwindling human resources due to migration and the retirement of key healthcare personnel have exacerbated the situation.
Despite earnest efforts by authorities and institutions to sustain health services, many specialists and patients commonly report a significant lack of access to quality care in both public and private health sectors. Recent clinical experiences further illustrate these challenges: essential cardiovascular medications such as thrombolytics for myocardial infarction, antiplatelet medications post-percutaneous coronary intervention (PCI) or bypass, anticoagulants for mechanical heart valves, and inotropes in intensive care units are often unavailable. Many institutions struggle to maintain a consistent supply of medicines even at higher prices. Moreover, constant changes in brands, sometimes provided as donations, can pose issues without proper assessment of pharmacological effectiveness and long-term product availability. This situation occasionally dissuades clinicians from initiating essential therapies. Furthermore, concerns arise regarding hospitals altering antibiotics based solely on availability rather than guidelines, which could contribute to the global emergence of antibiotic resistance in the long run.
Many medical or surgical devices have nearly doubled in price compared to pre-pandemic levels, reaching a point where even self-paying patients can no longer afford them. This challenge is compounded by the scarcity of health insurance options in the country, with the cost of enrollment on the rise. Moreover, most public health institutions, reliant solely on taxpayer funding, are struggling due to dwindling public resources.
Additionally, underlying issues such as chronic anxiety/stress, social deprivation, substance misuse, and the departure of healthcare providers further compound the challenges faced in healthcare provision and the maintenance of national health.
OOPE encompasses direct and indirect payments by households, including payments to health practitioners, pharmaceuticals, therapeutic devices, and other goods and services, as well as informal payments. Previous analyses have indicated that OOPE was primarily incurred by higher socio-economic strata, but recent findings suggest it is gradually encroaching upon lower socioeconomic strata as well.[8] High OOPE for healthcare have been shown to deter individuals from seeking healthcare, deteriorate health-related quality of life, and push families towards impoverishment, thereby threatening equity in healthcare. OOPE is predominantly incurred for medical practitioners (Rs. 40 billion/yr.; 40.6 percent), drugs and laboratory services (Rs. 31 billion/yr.; 31.5 percent), and private hospitals and nursing homes (Rs. 20 billion/yr.; 20.3 percent). Chronic illnesses alone account for 7.4 percent of monthly income spent on healthcare expenses.[9]
The shift of focus towards COVID-19 care and subsequent post-pandemic fiscal insecurities have seemingly resulted in recurring shortages, particularly for medications used in non-communicable diseases (NCD). Consequently, the high OOPE stemming from this scarcity often leads to poor drug compliance, which, regrettably, can result in various adverse effects and complications. Systematic data collection is imperative to comprehensively assess these deficits. Figure 1 below presents a root-cause analysis of the high OOPE experienced by patients with NCDs.
Figure 1. Root cause analysis. (Source: Anuji Upekshika Gamage et al., “Determinants of out-of-pocket health care expenditure in Sri Lanka,” Journal of College of Community Physicians of Sri Lanka 25, supp. (2019), 11, https://storage.googleapis.com/.)
Discussion
Ensuring universal access to all essential medicines and laboratory tests would alleviate the financial burden on patients, yet this presents a challenge to the healthcare system in Sri Lanka, given its inadequate public finances. Therefore, it is imperative to scrutinize the model for providing essential medicines to ascertain its sustainability.
Key questions healthcare administrators in Sri Lanka should contemplate include the following: Is the implementation of national health insurance feasible? Can reallocating tobacco/alcohol tax revenues and enhancing efficiency savings benefit the state health sector? Is it viable for the Finance Committee to designate a specific budget for healthcare? What public-private partnerships could enhance the fiscal capacity of the Ministry of Health? How can sustainable and affordable pricing of medicines be achieved? Is it possible to produce essential medicines at scale to meet the demand for UHC? Can efficiency be attained despite the strain on the system?
Clinicians also emphasize the need for efficient medicine distribution and utilization. The current system is plagued by inefficiencies such as wastage due to improper storage, quality failures, and inadequate post-marketing surveillance. Urgent attention is warranted to rectify these issues.
Efficiency gains within healthcare systems are imperative. Inefficiencies often stem from service delivery, medication management, healthcare workforce issues, disjointed data systems, and resource leakages.[10] Reforms must prioritize adequate budget allocations for essential medicines and the continuity of care for chronic illnesses.
Healthcare Technology Assessment (HTA) serves as a vital tool for evidence-based decision-making and the allocation of healthcare budgets to advance Universal Health Coverage (UHC). HTA bodies assess the effectiveness, costs, and health impacts of health technologies while considering ethical and equity issues.[11] Institutionalizing HTA requires a supportive environment and unwavering commitment. For example, the National Institute for Health and Care Excellence (NICE) in the United Kingdom focuses on the systematic evaluation of health technologies and cost-effectiveness analysis, facilitating evidence-based decision making. Establishing similar bodies in all countries is essential to ensure sustainable healthcare provision meeting adequate quality standards. International assistance and cooperation can play a pivotal role in enhancing and overseeing such bodies to improve healthcare quality globally.
Conclusion
A country with a poorly functioning healthcare system may be perceived as a liability by its allies and vulnerable to exploitation by others. Trust plays a pivotal role in international relations, and the inability to effectively manage health crises can undermine confidence in a nation’s governance and leadership.
Geopolitical alliances often hinge on economic cooperation. If a country’s healthcare system is deficient, it may struggle to maintain a healthy and productive workforce, posing challenges to economic collaboration within alliances and impeding shared prosperity and development goals.
A nation’s soft-power projection, encompassing cultural, educational, and healthcare achievements, can be compromised by subpar healthcare outcomes. Social instability may arise from dissatisfaction with the government’s handling of health issues affecting the populace. Migration and displacement of skilled and nonskilled workers from the country can exacerbate these challenges, straining relationships between nations and contributing to geopolitical tensions.
Countries with inadequate healthcare systems frequently rely on international aid and assistance. The geopolitics of aid can influence relationships between donor countries and recipients, affecting diplomatic ties and alliances.
Situated strategically at the nexus of major maritime routes in the Indian Ocean, Sri Lanka occupies a crucial position along sea lanes connecting the Middle East to Southeast Asia and East Asia. Given its proximity to the ambitions of major powers such as the United States, India, and China, all vying for dominance in the Indian Ocean, it is imperative for policy makers and global stakeholders to address medical shortages in Sri Lanka. This collective effort is essential to ensure regional peace, stability, and to prevent further disruption to global trade and food supply chains resulting from the potential loss of maritime security along yet another critical trade route to the West. ♦
Prof. Pandula Athauda-Arachchi
Prof. Athauda-Arachchi is a UK board-certified consultant interventional cardiologist, currently serving at Durdans Heart Centre in Colombo and as a professor at the Faculty of Medicine, General Sir John Kotelawala Defence University. His previous roles include serving at renowned hospitals in the United Kingdom, such as Liverpool Heart and Chest Hospital, Royal Gwent Hospital, and others. Dr. Athauda-Arachchi has extensive experience in coronary intervention, aortic valve procedures, heart devices, and cardiac imaging, gained through specialized training in the UK and fellowships in Interventional Cardiology. Recognized for his clinical excellence, he has received the fellowship of the European Society of Cardiology and has presented his work internationally at prestigious conferences. A recipient of the International Gates-Cambridge Scholarship, Dr. Athauda-Arachchi earned his PhD from the University of Cambridge and has a distinguished academic record, including graduating with First Class Honours from the University of Peradeniya, Sri Lanka. Dedicated to advancing cardiac care, he aims to provide evidence-based practice for the benefit of his patients.
Dr. Anuji Upekshika Gamage
Dr. Gamage is a board-certified consultant community physician, currently serving as a senior lecturer in Community Medicine at the Faculty of Medicine, General Sir John Kotelawala Defence University. With expertise in health economics, healthcare financing, and policy analysis, Dr. Gamage is actively engaged in healthcare reforms, focusing on primary healthcare strengthening and healthcare financing. She holds multiple qualifications, including MD and MSc degrees from the University of Colombo, and additional certifications in health economics from the University of Adelaide, Australia. Dr. Gamage has held various roles within the Ministry of Health in Sri Lanka, contributing to the advancement of community health initiatives. Committed to enhancing healthcare access and quality, she works diligently to improve the health outcomes of vulnerable communities, emphasizing the significance of migrants’ health in achieving universal health coverage and sustainable development goals.
Dr. Sridharan Sathasivam
Dr. Sridharan is a medical doctor in Sri Lanka, recognized for his contributions to patient safety, particularly in tertiary care women’s hospitals in the Colombo District. His research centers on healthcare professionals’ perspectives on patient involvement in safety measures. Dr. Sridharan’s work underscores the significance of patient safety culture and engagement in treatment processes.
Prof. Amala De Silva
Professor De Silva currently serves as a professor in the Department of Economic, Faculty of Arts, at the University of Colombo. She holds a PhD and DPhil, along with a Master of Arts from the University of Sussex, and a Bachelor of Arts Honours degree from the University of Colombo.
Prof. Rohini Fernandopulle
Prof. Fernandopulle holds the position of senior professor of pharmacology at the Faculty of Medicine, General Sir John Kotelawala Defence University. With a PhD from the University of Colombo, she has made notable contributions to the field of pharmacology through her involvement in diverse research projects and the publication of numerous scientific papers.