Public and private facilities find their place in providing quality health care and services to residents in Sri Lanka


Despite spending only a small percentage of its GDP on health, Sri Lanka is seen as a relative success story in South Asia. It has successfully tackled a raft of infectious diseases – from malaria to filariasis and rabies – that once ravaged its population, and created a public health system that provides inexpensive and quality care to all. Free universal health care is enshrined in the country’s constitution and the government runs the majority of the nation’s hospitals.

Like many developing nations, more sedentary lifestyles and changing diets have created a new burden for health services with a rising incidence of diabetes, heart disease and cancer. An ageing population is another issue – around 30% of the population is expected to be elderly by the year 2030. Furthermore, rising incomes mean higher expectations. Citizens are likely to demand improvements to public services as Sri Lanka moves from a low- to middle-income country.

“Although the model of extensive public provision has served Sri Lanka well, the country now finds itself at a crossroads,” the World Bank wrote in its Country Snapshot in October 2016. “Servicing the needs of the elderly, as well as treating and managing NCDs [Non-Communicable Diseases] requires longer–term and more expensive services relative to maternal and child health, and infectious diseases interventions.”

Sector Oversight

The Ministry of Health, Nutrition and Indigenous Medicine (MoHNIM) is responsible for disease control, preventive medicine – including family health, mental health and NCDs – curative medicine (the provision of hospitals) as well as other areas including oral health and the development of the country’s private health sector.

The Department of Ayurveda is dedicated to Sri Lanka’s 3000-year-old practice of indigenous medicine, with four specialisations: Ayurveda (the balance between mind, body and spirit for health and wellness), Unani (traditional medicine based on the four humours), Siddha (Tamil traditional medicine where the functions of the body are a combination of seven elements), and Paramparika (the name for traditional physicians who have had no formal institutional training). More than 3m patients each year opt for indigenous treatments.

A Successful Record

Key statistics underline the successes of Sri Lanka’s health system. In 2015 the country ranked 73rd out of 188 countries in the UN’s Human Development Index, with a score of 0.766. Life expectancy at birth rose to 74.9 years in 2015 compared to 74.1 years in 2010, according to organisation data. The infant mortality rate declined to 8.2 per 1000 births compared to 9.4 just five years earlier. As estimated 89.7% of the population has access to safe drinking water – with 44.9% enjoying piped water – helping to reduce the risk of water-borne diseases.

The island was certified malaria–free by the World Health Organisation (WHO) in September 2016, having been among the most affected countries in the world in the mid-20th century. Dr Poonam Khetrapal Singh, regional director at the WHO, noted Sri Lanka’s targeted approach of prompt and effective treatment, coupled with mosquito eradication efforts and the involvement of local communities for its success in tackling the mosquito–borne disease. No locally transmitted cases have been reported for nearly four years.

Sri Lanka has also worked diligently to reduce the incidence of rabies in the country, becoming the first country in the South-east Asia region to develop a national strategy for the elimination of a disease that is carried mainly by dogs and is almost always fatal without a prompt response. It has made post-exposure treatment available in government health facilities free of charge and is targeting zero rabies deaths by 2020, compared to a global target of 2030. The country recorded 12 deaths in the first nine months of 2016, compared to 24 in the whole of 2015 and 377 in 1970. “Political will and leadership have been the main drivers for success in the Sri Lankan effort to reduce the burden of disease attributable to rabies,” says a research paper published in the WHO South–east Asia Journal of Public Health in September 2016.

By The Numbers

At the end of 2015 Sri Lanka had 610 public hospitals and 217 private hospitals, up from 568 and 172, respectively, in 2010. All together the country’s hospitals provide around 76,800 beds. Doctors totalled approximately 21,800 in 2015, up from 16,500 in 2010, while the number of nurses and midwives were around 32,300 and 8300, respectively. According to the World Bank, Sri Lankans are, on average, within 1.4 km of a basic health clinic and within 4.8 km of a state-run, western-style facility.

As much as 70% of Sri Lanka’s rural population use indigenous medicine such as Ayurveda, with dedicated hospitals and clinics and a total of 1400 staff recruited under the Department of Ayurveda. There are more than 8000 traditional medical practitioners, three Ayurveda teaching hospitals, three research hospitals and 56 provincial hospitals. In addition, the sector has its own regulatory body – the Sri Lanka Ayurveda Medical Council.

The industry is built on a rich tradition related not only to curing disease, but also to religion and culture. The government is keen to draw on the island’s status as a biological hotspot to expand the sector further, as Sri Lanka is home to some 1500 species of the world’s 8000 known medicinal plants. Over the past decade the government has been following the Health Sector Master Plan that was launched in 2007 and structured around the UN’s Millennium Development Goals. The plan is characterised by increased investment in infrastructure and more equitable development, with a focus on under-served regions and improving the delivery of public services.

The 2017 budget plans for health show that 49% of the estimated total capital expenditure of LKR40.4bn ($275.6m) is targeted for hospital development projects and 16% for hospital rehabilitation works. Among the largest investments is an 850–bed maternity facility at the Helmut Kohl Maternity Hospital in Karapitiya, as well as improvement works to the hospitals in Jaffna, Anuradhapura and Kurunegala. Work is also under way on specialised cancer and cardiology centres so that Sri Lankans do not have to travel overseas for such treatments. Many health infrastructure improvement projects are undertaken with the assistance of foreign governments including China, the Netherlands and India.

War Effects

Sri Lanka is also seeking to address the legacy of its long years of conflict and colonialism, which have created large disparities in the availability of care in former war zones of the north and east, as well as for residents of agricultural estates, many of whom are ethnic Tamils encouraged to settle on plantations by the British when they controlled Sri Lanka.

Such communities had limited health care provision until the mid-1970s, at which time the government began gradually assuming more responsibility over care in those areas. In 1997 the Estate and Urban Health Unit was established under the Ministry of Health. The unit now operates 37 hospitals across the country’s plantations.

Direct intervention has helped reduce infant mortality rates, but its incidence remains considerably higher in these plantations than in the country’s other rural and urban areas. Additionally, the children of plantation workers are more likely to suffer from stunted height and low birth weight.

In the former conflict zones, health facilities – some of which became targets in the war – are being rebuilt, and families displaced by the fighting have returned. However, in places such as Mullaitivu, the site of ferocious battles in the last weeks of the war, the maternal mortality rate is 110 per 1000 live births, compared with 8.7 per 1000 live births in the capital. Decades of war affected the provision of essential health services, creating “poverty pockets” where access to medical assistance remains poor, says Thiloma Munasinghe, a consultant community physician who spoke with SciDev.Net, a website that analyses and publishes news on global development.

The war has also left a legacy of mental scars and trauma among combatants and civilians. The suicide rate on the island is the eighth highest in the world, according to the WHO, which has worked with the MoHNIM to develop mental health services. Around a quarter of the population suffers from some form of mental illness, according to the National Institute of Mental Health, which operates the country’s largest hospital for those suffering from psychiatric disorders. Nevertheless, Sri Lanka has only 90 consultant psychiatrists and 55 specialised psychiatric nurses.

The government has developed the Medical Officer of Mental Health programme to provide qualified doctors with additional psychiatric training so they can provide more specialised mental health care, but it is likely to be some time before there is an adequate staff to population ratio in this area. The programme has trained some 200 medical officers through 2016.

Space For The Private Sector

Private health offerings took off in Sri Lanka in the 1980s, shortly after the government allowed public sector physicians to operate in private practice and then relaxed a long-held aversion to the provision of vital services by for-profit companies. A mid-2014 review by the World Bank found the private health sector in Sri Lanka to be a “growing force”, one that reflected rising levels of investment as well as greater demand from a local population whose incomes are increasing. The economy grew at an average of 6.4% per year between 2010 and 2015, lifting per capita income to $3924 in 2015, according to the organisation.

Private health is dominated by locally-owned firms: Lanka Hospitals Corporation, in which state-owned Sri Lanka Insurance has a 54.6% stake; Nawaloka Hospitals; Durdans Hospitals (owned by Ceylon Hospitals); and Asiri Hospital Holdings, which is controlled by the Softlogic Group, a company listed on the Colombo Stock Exchange. Public-private partnerships (PPP) are rare, with most private firms operating independently. Ravi Karunanayake, then-minister of finance and current minister of foreign affairs, suggested in the 2016 budget speech that the government might sell some of its business interests, increasing speculation that the Sri Lanka Insurance Corporation may sell its majority stake in Lanka Hospitals.

Private care is currently concentrated in the wealthier western province, Colombo and other main urban centres where people tend to have higher incomes. Private operators focus on curative medicine and outpatient services, and attract patients who want to get treatment more quickly or enjoy more privacy, says Dr Wimal Karandagoda of Durdans Hospital, which was established in 1945 in Colombo.

The majority of patients pay for treatment out of their own pockets, with few subsidies from the government or payments from insurance companies. Private health expenditure, mostly covering doctor fees, is more than half of total health expenditure, according to the World Bank. Private health care revenues are expected to record a compound annual growth rate of 8.3% from 2013-20, with revenue reaching $2.1bn by 2020. The government’s decision to suspend the 15% value-added tax (VAT) that was imposed on health care services in May 2016 was welcomed by the industry. Operators such as Softlogic Group said the tax made private sector treatment too costly for some patients, adversely affecting their business.

Private Growth

Expansion in the private sector has also been supported by patients who travel from countries such as the Maldives for treatment in Sri Lanka. The government identified medical tourism as a potential source of income and economic growth in 2014 when it launched the 2015-20 National Masterplan Initiative on Medical Tourism in conjunction with the Private Hospitals Association. Some hospitals are seeking international accreditation as a way to make themselves more marketable, particularly internationally where Sri Lanka is competing with established medical tourism providers such as Malaysia and Thailand. Durdans Hospital was the first to be accredited with the Gold Seal of Approval from Joint Commission International in 2014, a US-based accreditation scheme. Meanwhile, in 2016 Lanka Hospitals became the first in the country to secure accreditation with the US-based Medical Travel Quality Alliance. The former operates a 350-bed tertiary hospital and has its own international patient care centre to cater to the needs of patients who have travelled from overseas.

The expansion of the private sector, however, is putting pressure on staffing requirements because many doctors work in both the public and private sectors, and both rely on the same universities and institutions to train staff. While doctors are allowed to work fluidly between both sectors, that is not the case for all medical professionals, such as nurses. “There is a lack of standardisation between public and private hospitals which creates rigidity in the sector. Public hospitals don’t recognise the certificates of qualifications that nurses obtain from private hospitals,” Ajith Tudawe, chairman at Durdans Hospital, told OBG. Private sector operators told the World Bank that a lack of qualified medical personnel was the biggest barrier to their success, followed by limited access to finance and land, and competition from providers.

The government is trying to address the staffing issue through a number of initiatives. With its eye on international patients, it is streamlining the process for appointing foreign specialists to temporary contracts. The 2017 budget also includes a youth training programme for the health care sector, with the state providing trainees with a monthly stipend of LKR10,000 ($68.20) over the three-month initiative, and a job upon completion. It also set aside LKR200m ($1.4m) to upgrade training schools for nurses.

Regulating The Industry

Sri Lanka’s health care sector is regulated by the MoHNIM, which leads all policy-making and implementation, assisted by ministries across the country’s nine provinces and, below them, 25 ministries at district level.

The operations of the private sector fall under the Private Health Services Regulatory Council (PHSRC), which was formed as part of the Private Medical Institutions (Registration) Act No. 21 of 2006, and is headed by the director-general of health services. All private providers are supposed to register with the PHSRC, but research by the World Bank in June 2014 found that the system was “not functioning optimally” because a significant percentage of privately-operated facilities were providing medical services without being registered by the relevant authorities. The report also questioned the independence of the regulator, whose members include the private providers that the body is supposed to oversee.

In addition to the regulatory council, the Sri Lanka Medical Council (SLMC) enforces standards and discipline. It includes representatives from the profession as well as from the medical faculties of the country’s public universities, with the aim of protecting patients. Under the Medical (Amendment) Act No. 30 of 1987, the SLMC can enter training institutions to check standards and recommend the withdrawal of recognition for those who fail to make the grade. The Postgraduate Institute of Medicine, which is affiliated with the University of Colombo, is responsible for the specialist training of doctors at the postgraduate level. The University Grants Commission, which oversees tertiary education, also has a say in the training of medical professionals, including doctors and nurses.

When it comes to drugs and other potentially dangerous substances, key regulatory agencies include the National Authority on Tobacco and Alcohol, and the National Medicines Regulatory Authority (NMRA). The NMRA which was established in 2015 with a goal “to ensure [the] availability of medical drugs and devices at affordable prices”.

A separate regulatory body oversees indigenous medicine. The government announced in its 2017 budget that all pharmacies in the country would be required to register with the NMRA with immediate effect to tackle the large number of unqualified pharmacists and unregulated chemists in the country.

Greater regulation of the private sector is expected under the government’s development plans for health care. International consultancy PwC warns that while the private sector market in Sri Lanka could be worth over $2bn by 2020, there are also likely to be substantial risks associated with compliance. “Navigating the complex landscape of agencies and regulations while planning for the future adoption of global best practice regulations can be challenging,” it noted in its June 2014 report “The Health Sector of Sri Lanka”.

Shifting Focus

Trends under way in the health sector reflect the country’s evolving needs and the necessity to address not only rising levels of NCDs, but also an ageing population. Approximately 30% of Sri Lankans are expected to be over the age of 65 by 2030, while some 65% of all deaths are now the result of conditions such as heart disease, diabetes and cancer. Such illnesses typically demand longer stays in the hospital and specialised treatment.

Sri Lanka recognised the need to address NCDs back in 2009 with the National Policy and Strategic Framework for Prevention and Control of Chronic and Non-Communicable Diseases. An analysis of standardised data covering 1991-2001 showed that mortality from chronic NCDs was 20-30% higher in Sri Lanka than in many developed nations.

The Health Sector Master Plan 2007-16 also prioritises the prevention and control of NCDs, recognising that “these diseases lower the quality of life, impair the economic growth of the country, and place a heavy and rising demand on families and national budgets”. The plan aims to reduce premature death due to chronic illnesses by 2% annually up to 2019 through a variety of policies, including the expansion of evidence-based curative services, the use of preventive screening programmes, and the promotion of healthy living initiatives at the national and community levels.

Sri Lanka has been working with the World Bank and WHO to meet its NCD goals and was the eighth country in the world to join the UN Interagency Task Force on the Prevention and Control of NCDs.

According to the country’s NCD progress monitor which covers 10 indicators, Sri Lanka has had some success in setting national targets and indicators for NCDs, introducing measures for the control of alcohol and tobacco, and raising public awareness around diet and exercise. The country was found to be less successful in imposing diet-related restrictions, marketing to children, and providing drug therapy and counselling for high-risk people.

In the 2017 budget Karunanayake announced a renewed focus on the needs of children, with a plan to ensure that the health authorities visit every primary school in the country once per term. A health insurance policy is also being offered to all children aged five to 19, with the government paying the premium for each policy – worth LKR200,000 ($1360). The insurance covers both outpatient and inpatient services. “NCDs are on the rise not only among adults, but among children as well, with diabetes, asthma and cancer being the main NCDs,” Karunanayake told Parliament in his speech. “Most NCDs can be prevented, cured or controlled if diagnosed at the right time.”

Statistics show that of 138,000 deaths in 2014, 40% were the result of cardiovascular diseases, 10% from cancers, 7% from diabetes and 8% from chronic respiratory diseases. At the same time, 16.2% of men and 28.4% of women were found to have a body mass index of 25 or more – indicating that one is overweight – while 21.6% of men and 20.8% of women had raised blood pressure. Some 30.2% of women were also not getting sufficient exercise. In an attempt to decrease the 30,000 deaths per year attributed to tobacco, in September 2106 the Cabinet agreed to impose a 15% VAT on the sale of cigarettes and increase the production tax per cigarette by LKR5 ($0.03). The government estimates the annual cost of treating tobacco-related illnesses at approximately LKR72bn ($491m).

Technological Shift

The government is also leveraging technology as a way to reduce costs, improve data collection and raise efficiency within the health sector. The National eHealth Guidelines and Standards for Sri Lanka were released in March 2016 to ensure connectivity and maintain security across the health system in both the public and private sector. “Health care is an information intense field,” the report noted in the introduction. “Relevant, accurate and timely information is the key for evidence-based management in health care. … The paper-based record system is inadequate to meet the needs of [the] rapidly evolving present day health care system.”

Adoption of technology has been quite slow so far with the e-health initiative expanding from 12 hospitals in mid-2015 to 40 in October 2016. Rajitha Senaratne, the minister of health, now plans to extend the programme to a further 150 hospitals.

In the long-run, officials want to introduce a national health ID number for all citizens, improve hospital management of health records and create a national database of medical data. There is hope that technology can help improve diagnostics and patient care – especially in rural areas – and ensure that the supply of medicine is more efficient.

Encouraging Foreign Investment

Senaratne indicated to Qatar in October 2016 that the Sri Lankan government would be open to foreign investors in the area of e–health, as well as in the pharmaceutical sector, noting that the island’s free trade agreement (FTA) with India ensured a guaranteed market for medicine made under the FTA.

The Board of Investment of Sri Lanka has made pharmaceutical manufacturing a priority as part of the country’s attempt to reduce its import dependence. India provides the majority of Sri Lanka’s pharmaceutical imports, followed by Switzerland, Pakistan and the UK, but generics have been taking over an increasing share of the total market. In 2015-16 India exported medicine worth $205m to Sri Lanka.

The government in Colombo wants to encourage foreign manufacturers to establish factories in the country by setting up special economic zones that would offer preferential rates and tariffs to manufacturers based there. The State Pharmaceuticals Manufacturing Corporation of Sri Lanka, which provides medicine to public health services across the country, currently dominates the market, producing almost half of the drugs manufactured domestically.


Sri Lanka is keen to build on its success in public health, with the government also showing a willingness to cooperate with the private sector. Some of the improvements to government hospitals are being undertaken through PPP agreements, while the most recent budget includes plans to establish paying wards within government hospitals in partnership with private operators. How these initiatives will pan out in a country where the government is expected to take a lead and ensure equity of access remains to be seen, however, as privatisation continues to attract considerable political and societal resistance.


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The Report: Sri Lanka 2017

Education & Health chapter from The Report: Sri Lanka 2017

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