The Nepalese primary healthcare system at sub-district level consists of three different levels of health facility to serve the mostly rural population. The Ministry of Health and Population decentralised health services by handing over 1433 health facilities in 28 districts to Health Facility Operation and Management Committees (HFOMCs), which were formed following a public meeting, and consist of 9 to 13 members, representing the health facility in-charge, elected members of the village development committee, dalit (disadvantaged caste) and women members. The purpose was to make this local committee responsible for managing all affairs of the health facility. However, the handing over of the health facilities to HFOMCs was not matched by an equivalent increase in the managerial capacity of the members, which potentially makes this initiative ineffective. The Health Facility Management Strengthening Program was implemented in 13 districts to foster good governance in the health facilities by increasing the capacity of HFOMCs. This effort focuses on capacity building of HFOMCs as a continuous process rather than a one-off event. Training, follow-up and promotional activities were conducted. This article focuses on how good governance at the peripheral public health facilities in Nepal can be fostered through the active engagement and capacity building of HFOMCs. This article used baseline and monitoring data collected during technical support visits to HFOMCs and their members between July 2008 and October 2011. The results show that the Health Facility Management Strengthening Program was quite successful in strengthening local health governance in the health facilities. The level of community engagement in governance improved, that is, the number of effective HFOMC meetings increased, the inclusion of dalit/women members in the decision-making process expanded, resource mobilization was facilitated, and community accountability, as measured by health facility opening days, increased. Furthermore, availability of technical staff, supervision and monitoring, and display of the citizen charter increased, and health services became more inclusive. Several lessons emerged. Functioning of HFOMCs is largely dependent on the process of selecting members, the staff and community's support of the HFOMC, and a sense of volunteerism and team spirit among the members. Similarly, to ensure the effective participation of dalit/woman members, the educational and livelihood empowerment of the members is deemed necessary. Furthermore, capacity building of and giving authority to HFOMCs should go hand-in-hand. Local governance of health facilities was fostered through the local people's active engagement in HFOMCs and capacity building of the HFOMC members.
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