Context: Kerala's government health-care system functions relatively well compared with other Indian States, but utilization levels are decreasing due to lack of essential facilities. The opportunity cost of seeking medical care from the government sector is high, even for the poor, with 60-70% of the poor seeking care from the private sector and spending disproportionately on health care (about 40% of income compared with 2.4% by the rich). In 1996, the Kerala government brought primary health centres (PHCs) under the control of local governments (panchayats).
Objective: To provide an approach to assess PHC performance under decentralized government.
Methods: The study was conducted in three stages. The first stage included all 990 village panchayats in Kerala. The second stage covered 10 panchayats (their respective 10 PHCs and 65 sub-centres) occupying the top five and bottom five ranks in terms of resource allocation to health. Two panchayats (their respective PHCs and sub-centres), one each from the top five and the bottom five, were chosen for the third stage. Published and unpublished government data, panchayat development reports, panchayat and PHC records, facility checklist, and key informant and client exit interviews were used for data collection.
Findings: Panchayats in Kerala allocated a lower proportion of resources to health than that allocated by the state government prior to decentralization; while panchayat resources grew at an annual rate of 30.7%, health resources grew at 7.9%. PHCs were funded to the extent of 0.7-2.7% of the total cost. An additional 2% in PHC resources was associated with improved patient load (63.5%), cost-effectiveness (50.8%), medicine supply (49.4%), information (32.8%) and patient satisfaction (12.7%). An annual increase of US$940 in PHC resources would help to extend primary care facilities to 3000 (15.5%) more users.
Conclusion: Decentralization brought no significant change to the health sector. Active panchayat support to PHCs existed in only a few places, but wherever it was present, the result was positive. Kerala should find an alternative strategy to channel panchayats towards health before health loses its battle for resources.