The Public Health Sector in Peru primarily serves the poor. Its performance, as measured by health
status outcomes, has been positive in some areas such as immunization coverage, reduction of infant
mortality, and increases in institutional baby deliveries. However, there are still problems that need to be
addressed such as maternal mortality and cross-sectoral issues such as full equity and risk protection. But
from a budgetary perspective, there is no clear correlation between the amount of money allocated and
health outcomes. This is explained by the fact that there is no established causality between inputs and
results and that the processes in expending public monies are cumbersome, not transparent, inefficient,
and full of loopholes that have created perverse incentives.
The main objective of the study was to gain a clear understanding of the logic and sequence of budget
flows and to discover bottlenecks throughout the process that can impede the adequate use of limited
resources. In addition, the study reviews the relationship between flows and expenditures, on the one
hand, and the flows and decision-making process on the other hand. In as much as possible, the study
follows Public Expenditure Tracking Survey (PETS) Methodology and applies it to one health cluster in
Metropolitan Lima.
The study was exploratory but results were promising and the implementation of a survey gave us
enough information to firmly state that “it is not only a question of how much money the sector is
assigned, but also of how and when the resources reach the frontline providers”. The analysis of frontline
providers and intermediate-level agencies in this study identified institutional bottlenecks and possible
perverse incentives that reduce positive budget incidence. Constraints and perverse incentives are present
in the salary structure, the use of fee collection and petty cash management, procurement rules, and
elsewhere. The current context in Peru, where a Results-Based Budget is being piloted, provides an
opportunity to incorporate adjustments in the management processes.
Key words: Health sector, Peru, decision making
Author(s): Betty Alvarado, Eduardo Morón
Series: Documento de Discusión; DD/08/10
Publisher: Universidad del Pacífico (UP) - CIUP
Year: 2008
Language: English
Pages: 108
City: Lima
Tags: Peru; Health sector, Peru, decision making
THE ROUTE OF EXPENDITURES AND DECISION MAKING IN THE
HEALTH SECTOR IN PERU..............................¡Error! Marcador no definido.
GLOSSARY..........................................................................................................3
ABSTRACT ..........................................................................................................5
A. INTRODUCTION...........................................................................................7
B. OVERVIEW.....................................................................................................8
C. METHODOLOGY........................................................................................10
1. Objective.................................................................................................................10
2. Process of applying PETS in this study..................................................................12
D. MACRO VIEW OF THE BUDGET PROCESS........................................15
1. Organization ...........................................................................................................15
2. Budget cycle ...........................................................................................................15
3. Health Financing in Peru ........................................................................................17
4. Budget flows...........................................................................................................18
E. MAIN FINDINGS..........................................................................................24
1. Benefit Incidence of Financing ..............................................................................24
2. Human Resources and Salaries ..............................................................................27
3. Goods and Services ................................................................................................36
4. Influence of SIS management ................................................................................41
5. Management, Petty Cash and Insurance Reimbursement ......................................43
F. CONCLUSIONS AND RECOMMENDATIONS ......................................56
REFERENCES ...................................................................................................59
ANNEXES...........................................................................................................61
Annex 1 - Interviewees.........................................................................................................61
Annex 2 - Characteristics of Health Directorate II South Lima (DSLS)..............................62
Annex 3 - Geographical distribution of health facilities in the ............................................64
Barranco-Chorrillos-Surco Network ....................................................................................64
Annex 4 - Characteristics of a C I-3 Health Facility ............................................................65
Annex 5 - Focus of Health Strategies...................................................................................66
Annex 8 - Health Directorates (DISA) EU that did not plan for anti tuberculosis drugs,
2007 72
Annex 9 - Facilities Survey Template ..................................................................................73
Annex 10 – Health Network Survey Template ....................................................................91
