Healthcare rationing: a guide to policy directions in Sri Lanka.

Sri Lanka's tax-financed public health system has played a significant role in achieving high levels of health status for its people. The 21st century brings new challenges in terms of rapidly aging population and increasing prevalence of NCDs. These challenges are expected to place a heavier burden on the government health financing and provision. However, the government expenditure as a proportion of GDP has declined to 1.1-1.2%, the lowest level, since the country's independence in 1948. Available funding is channeled out of the preventive services and primary healthcare to the complex hospitals, contributed by inadequacy of prioritization in resource allocation. Already, there are evidences of high level of under-funding and implicit rationing with higher impacts on the rural poor and the estate poor. Analysis of the government subsidization of healthcare shows shifting of benefits to the urban better-off from the poor. In light of the findings, the paper focuses attention on policy directions the government health sector in Sri Lanka should follow.