Pakistan’s health sector is once again under the spotlight after a World Bank report identified deep-rooted flaws in the way the country manages its health budgets. The report warns that inefficiencies in budgeting and fund execution are compromising service delivery at every level of the healthcare system.

Ineffective budgeting practices

According to the report, titled Budget execution in health: from bottlenecks to solutions, Pakistan continues to rely on outdated practices when preparing annual health budgets. Instead of using accurate costing estimates, allocations are often based on historical trends. This approach frequently results in expenditure overruns or underspending, leaving critical services underfunded.

The budgeting process also remains highly centralized, with little input from local health facilities that understand their on-ground needs. This lack of decentralization often produces unrealistic cost projections and allocations that fail to address actual requirements. Fiscal constraints and mid-year budget cuts add further strain, widening the gap between resources and needs.

Weak fund release mechanisms

Another serious challenge identified is the unpredictability of fund releases. Health facilities across Pakistan have reported delays that affect their ability to cover routine expenses such as utility bills. The report highlights that weak cashflow management and poor revenue forecasting are major reasons behind frequent under-execution of health budgets.

Routine payments are also stuck in bureaucratic processes. Even small bills, sometimes as low as Rs200, are subjected to the same lengthy approval procedures as those exceeding Rs1 million. This duplication of internal controls creates unnecessary delays and prevents health facilities from functioning smoothly.

Limited autonomy and connectivity gaps

The World Bank acknowledged the introduction of the “Green Corridor” system, which is designed to fast-track low-value transactions. However, it stressed that broader reforms are urgently needed to address inefficiencies across the sector.

One of the key issues is the lack of financial autonomy for health facilities. Hospitals and clinics remain heavily dependent on centralized approval mechanisms, limiting their ability to respond quickly to operational challenges. Automated reporting systems are available, but poor connectivity across rural and decentralized areas causes significant delays in financial reporting. This weakens the government’s ability to monitor and adjust budget execution in real time.

Call for reforms

The findings underline the urgent need for Pakistan to modernize its health financing system. Experts argue that decentralization, better costing methods, and timely fund releases are essential if the health sector is to meet rising demands. Without reforms, the system will continue to struggle with inefficiency, leaving millions of people without reliable healthcare access.