Health system strengthening and the importance of public investment: a study of National Rural Health Mission in Bihar

Introduction Chronic under-investment in government health systems has led to significant weakening of these systems and crippled their ability to deliver good quality health care. Through the introduction of the National Rural Health Mission (NRHM), there have been efforts to increase public spending in health and strengthen health systems in rural areas. However, evidence shows that the increase in fund did not necessarily result in its utilisation. In the initial period of NRHM, a considerable amount of funds were under-utilised. It was argued that further increase in spending is unwarranted as the public health system does not have the capacity to absorb funds. The present study is an attempt to draw linkages between system strengthening and fund absorption capacity to argue that only consistent investment can make health systems stronger. This in turn would allow the system to absorb more funds. We tracked the fund flow and fund absorptive capacity under the NRHM at various levels: state, district, block and village. We sought to understand reasons for under-spending and study the various aspects of quality of spending in a district in Bihar.