Overcoming the challenges facing Nepal's health system during federalisation: an analysis of health system building blocks
Sharada Prasad Wasti, Edwin van Teijlingen, Simon Rushton, Madhusudan Subedi, Padam Simkhada, Julie Balen
Health Research Policy and Systems · 2023 · DOI: 10.1186/s12961-023-01033-2
Countries: Nepal
What Was Studied
This exploratory qualitative study examined how Nepal's health system is adapting to federalisation, following the 2015 Constitution's devolution of authority across federal, provincial, and local governments. Between 2021 and 2022, researchers conducted 145 key informant interviews (49 policy-level representatives, 48 health service providers, 22 elected local members, 16 Female Community Health Volunteers, and 10 other stakeholders) and 12 participatory policy analysis workshops (163 participants) across the federal government, three purposively selected provinces (Bagmati, Lumbini, and Karnali, representing Nepal's Hill, Terai, and Mountain ecological belts), and nine municipalities. Data were thematically analysed in NVivo using the WHO's six health system 'building blocks' framework (leadership/governance, service delivery, financing, workforce, medicines/technologies, and information systems), following COREQ reporting guidelines.
What They Found
Across all six WHO building blocks, participants identified both opportunities and challenges of federalisation. On governance, tailored local health policymaking was praised (one municipality reported drafting 80–90 new local health rules and regulations), but poor inter-tier coordination and the federal Ministry of Health and Population's continued centralised, dominant role were repeatedly cited as challenges. On service delivery, Sindhupalchok district reported expanding from a handful of facilities to 125–126 health posts and two hospitals post-federalisation. On financing, the national health sector budget share rose from 4.6% (2017/18) to 8.6% (2021/22), yet Karnali Province spent only 20% of its allocated budget for two consecutive years, and delayed fund releases and budget duplication across tiers were widespread complaints. On workforce, one remote province reported only one-third of clinical doctor posts filled (two-thirds vacant), alongside skills-mismatched staff placements. On medicines, procurement costs rose sharply post-federalisation (one respondent cited a medicine that cost 1 rupee under the unitary system now costing 7 rupees), and only 1.3% of health facilities carried all 18 WHO trace medicines (2021 survey) — barely improved from 2015. On information systems, 99% of facilities now report data electronically via DHIS-2, but only 7 in 10 had trained DHIS-2 staff, with marked provincial variation (Lumbini 79.2% vs. Bagmati 61.9% vs. Karnali 63.1%).
What This Means for Nepal
This study — cited directly in NHPL's own knowledge base as the primary source documenting how Nepal's Schedule 9 concurrent health mandate produces coordination failure — offers ground-level evidence for two of Nepal's current (2026) reform priorities: federalism implementation and health-workforce retention. Its finding that province-level Public Service Commission delays are stalling permanent staff recruitment (leaving posts like Karnali's clinical-doctor vacancies unfilled) points to a concrete, actionable fix: the Ministry of Health and Population and provincial governments should expedite provincial Public Service Commission establishment and update the still-operative 1997 Health Service Act to explicitly delineate federal, provincial, and local health roles under Schedule 9 — reducing the budget duplication and delayed fund releases this study documents across Bagmati, Lumbini, and Karnali.
Contextualisation
Nepal's 2015 Constitution assigns health as a concurrent (Schedule 9) responsibility across all three tiers of government — federal, provincial, and local — a constitutional design that this paper's own authors identify as a named source of coordination failure between the Ministry of Health and Population, the seven provincial health directorates, and Nepal's 753 local governments. Nepal still operates under the pre-federal 1997 Health Service Act, with no federalism-aligned successor yet enacted, leaving local elected officials and health workers navigating budget duplication, staff-adjustment mismatches, and delayed fund releases documented across Bagmati, Lumbini, and Karnali provinces in this study.