Mehmood ul Hasan Qadir — Economist & Financial Analyst | Dubai, UAE

The Pakistan Ledger | Opinion

Pakistan’s public health expenditure — the amount the government spends from public funds on the health of its 220 million citizens — has hovered between 1% and 1.2% of GDP for most of the past decade. The WHO recommends a minimum of 5% of GDP in public health expenditure for a functioning healthcare system. Bangladesh spends approximately 2.4% of GDP on health. Sri Lanka, despite its recent economic crisis, maintains public health expenditure above 1.5% of GDP. Sub-Saharan African countries that economists routinely use as benchmarks for underdevelopment outperform Pakistan on this measure. To spend 1% of GDP on health for a population of 220 million people, in a country where infectious disease burden is high, maternal mortality is elevated, and non-communicable diseases are rising rapidly, is not a fiscal constraint. It is a policy choice. And it is, by any reasonable standard of governmental responsibility to citizens, an abandonment.

The National Health Accounts — What the Data Shows

Pakistan’s National Health Accounts — compiled periodically and representing the most comprehensive official accounting of health expenditure flows — document a healthcare financing structure that is extraordinary in its dependence on out-of-pocket household payments. Approximately 55–60% of total health expenditure in Pakistan is borne directly by households at the point of care — as consultation fees, medicines, diagnostic tests, and hospitalisation costs. This out-of-pocket share is among the highest in the world and reflects the absence of meaningful health insurance coverage for the majority of the population.

The consequence of high out-of-pocket expenditure is catastrophic health expenditure incidence — the proportion of households that are pushed into poverty or deeper poverty by a major health event. World Bank and WHO analysis of Pakistan’s health financing suggests that 4–5% of Pakistani households experience catastrophic health expenditure in any given year — millions of families driven to asset liquidation, debt, or destitution by a medical crisis that a functional health financing system would absorb. This is not a statistic. It is a description of the lived experience of millions of Pakistani families every year.

Sehat Sahulat — The Right Idea at Insufficient Scale

The Sehat Sahulat Programme — a government health insurance scheme providing hospital coverage to enrolled low-income households — is Pakistan’s most significant health financing innovation in decades. Expanded under the PTI government to cover all households in KPK and means-tested households nationally, it provides coverage of Rs. 1 million per family per year for hospitalisation at empanelled hospitals. The programme design is sound. Its limitations are in coverage completeness, claims management efficiency, and the gap between insured households and the availability of quality empanelled hospitals in rural and underserved areas.

Sehat Sahulat’s claims data reveals the pattern of health service utilisation by covered households — dominated by surgical admissions and maternity care, with limited primary and secondary outpatient care covered. The programme addresses catastrophic hospitalisation costs but does not substitute for the primary healthcare infrastructure deficit that means preventable conditions reach hospital-requiring severity because they were not identified and managed earlier in the disease progression.

Bangladesh and Sri Lanka — The Comparison Pakistan Should Study

Bangladesh has achieved health outcomes — maternal mortality rates, child mortality rates, life expectancy, vaccination coverage — that have dramatically improved over the past three decades, despite Bangladesh being poorer than Pakistan in per capita income terms for much of this period. The Bangladesh health outcome improvement was driven by a combination of government primary health infrastructure, NGO sector service delivery that partially substituted for state capacity, and community health worker programmes that extended preventive and maternal health services into underserved rural populations at low cost.

Sri Lanka’s health system — built on a foundation of free, universal public healthcare at the point of delivery — has produced health outcomes comparable to middle-income countries despite Sri Lanka’s relatively modest per capita income. Sri Lanka’s public hospital system, while under significant strain during the economic crisis, has maintained coverage that prevents the catastrophic out-of-pocket expenditure that Pakistan’s system imposes on its citizens. The lesson is not that Pakistan should copy Bangladesh or Sri Lanka wholesale. The lesson is that better health outcomes at Pakistan’s income level are achievable with political commitment to health as a public good rather than a private financial transaction.

Pakistan’s 1% of GDP health expenditure reflects a choice by successive governments to protect defence spending, debt service, and civil service salaries while cutting development and social sector expenditure when fiscal pressure requires adjustment. Until that priority ordering is challenged — until the political cost of inadequate health provision exceeds the political cost of reforming the fiscal structure that underfunds it — the abandonment will continue. And Pakistani families will continue paying for it, literally, in catastrophic out-of-pocket costs that no developing country should impose on its most vulnerable citizens.

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Mehmood ul Hasan Qadir is an Economist and Financial Analyst based in Dubai, UAE. He writes on Pakistan’s economic structure, policy failures, and reform pathways for The Pakistan Ledger.