Fixing Bangladesh’s health system: a phased and practical path forward

Bangladesh's progress in maternal and child survival, expanding immunization coverage, that have saved millions of lives over the past three decades grabbed global attention. Yet low public spending, high out-of-pocket (OOP) payments, workforce imbalances and mal-distribution, weak regulation, and an emerging epidemic of chronic disease are undermining the gains and leaving families exposed to financial distress when illness strikes. But inaction is not an option. Rather, we need a practical, phase-wise roadmap for transformation. Experience from other countries that faced similar context can guide a feasible path for Bangladesh. 

Bangladesh spends very little per person on health, which is severely inadequate for a country that must provide both traditional primary-care services and growing chronic-disease care needs. Equally troubling is the financing mix with out-of-pocket payments still account for a very large share of health spending. The outcome is obvious: households absorb the financial risk when illness happens resulting in catastrophic expenditure and impoverishment. 

But numbers only tell part of the story. The concern is compounded by understaffed primary healthcare, overcrowded tertiary facilities, a fragmented private sector of uneven quality, weak regulatory oversight, pervasive corruption, and limited digital integration.Therefore, a modest increase in spending can fail to deliver results unless accompanied by governance, purchasing, and human-resource reforms.

The health system is complex, so is the reform. Therefore, any reform proposals must be sequenced and pragmatic, tailored to the country's context.The first principle is to protect the poor and vulnerable. The second is to reorient spending toward high-impact primary care, essential medicines, and preventive interventions rather than simply adding hospital beds. The third is to use proven fiscal instruments both to discourage harmful behaviour and to create predictable revenue for health.

With those principles in mind, I propose a three-phase plan: immediate (0–12 months), medium (1–3 years) and long term (3–7 years). Each phase blends fiscal, institutional, and service delivery reforms and points to country experiences. A phased reform strategy with delivering early gains while building long-term capacity offers the most credible path forward.

The immediate priority should be to reduce catastrophic financial risk and demonstrate that reform can deliver visible benefits within the next twelve months. A targeted increase in sin taxes (taxes on harmful products such as alcohol, tobacco, etc.) is one of the fastest and most defensible entry points. Higher sin taxes can reduce consumption of harmful products while generating new revenue, and if even a modest increase is transparently earmarked for primary health care and essential medicines, the benefits become immediately tangible. Transparency is also crucial here. Citizens must be able to see that additional revenue is flowing directly into clinics, medicines, and frontline care.

These new resources should be rapidly channelled into a short, high-impact package of free primary-care services at the union level. Outpatient consultations, basic diagnostics, maternal and child health services, and essential medicines for common non-communicable diseases should be prioritised. When medicines are available and fees are removed, utilisation rises quickly and public confidence follows. This expansion should be tied to increase in service volumes, medicine availability, and basic quality indicators, ensuring accountability without overburdening providers. Piloting strategic purchasing in a handful of districts using capitation or output-based payments supported by basic digital patient registers can further demonstrate how funding linked to performance improves results.

Over the medium term, spanning one to three years, the focus should shift from pilots to scalable financing mechanisms and institutional strengthening. Establishing a phased social health insurance system is central to this effort. Targeting the low income and marginalized through subsidy and including formal sectors through employment based insurance mechanisms. International experience, particularly from Thailand, shows that gradual expansion of entitlements backed by sustained public financing and a strong primary-care backbone can achieve near-universal financial protection. Bangladesh should adopt a similarly pragmatic approach, beginning with formal-sector and public employees while subsidising coverage for the poor and near-poor, and setting out a clear pathway to include informal workers.

In the longer term, over three to seven years, Bangladesh must consolidate risk pooling and build a resilient universal system. Fragmented financing arrangements enhance inequality. Therefore, a single purchasing mechanism with a common benefits package is essential to enable cross-subsidisation and effective price negotiation. Strategic purchasing and performance-based contracting should replace input-based budgeting. In addition, preventive services, and effective management of chronic disease are paramount. Achieving this vision will require sustained increases in public health spending, financed through a mix of general revenues, prioritised budget allocations, and progressive taxes such as further tobacco or sugary-drink levies, complemented by continued efficiency gains.

The political economy of reform cannot be ignored. Early and visible improvements of free medicines, shorter waits, and transparent use of new revenues are essential to build public support. Health workers and private providers must see clear, fair pathways within the new system, and protections for the poor must be explicit at every stage. 

Bangladesh has the capacity to make this transition. The experiences of Thailand and Rwanda show that progress is possible when reforms are sequenced, inclusive, and anchored in strong primary care. The costs of inaction are financial hardship, preventable deaths, and declining trust are very high. We should start with a simple one, because every little counts. 

The author is Director, Institute of Health Economics, University of Dhaka.