Perspectives on Demand Side Financing, Social Safety Nets and the MDGs Dr. Adnan A. Khan Director Research and Development Solutions, Islamabad LEAD Workshop on Demand Side Financing, Social Safety Nets and MDGs 15 th February 2013

Key Consideration Health Access to Healthcare Healthcare ? ? ?

The Issue Enabling the poor to actually pay for and consume a good or service Effective Demand Supply Purchasing Power Demand for Health care

RAND Experiment Large Scale, Multi Year experiment, in the 1970s, in the US Participants who paid for their healthcare, used around 30% fewer healthcare services Cost sharing and decreased use was similar for highly effective and less effective services Free care led to better care of hypertension, vision and dental health, particularly for the poorest and sickest patients Overall health/ longevity was unchanged

Composition of Outpatient Visits in Pakistan Source: Multiple Studies

Financing of Health in Pakistan Source: National Health Accounts

Private Funding and Preventive Health 90%+ goes to curative healthcare 50-60% of family planning is self paid 35%+ birthing services are self paid 3% of childhood immunization are in the private sector

Options for Health Financing: Out of Pocket Payments AdvantagesIssues Low Cost May ignore important but unrealized needs such as preventive services Client Need Based Can be expensive, particularly for hospitalizations and chronic illnesses Specific in Location and Need Increased unnecessary services such as unneeded Caesarean sections and Injections

Options for Health Financing: Government Services AdvantagesIssues Can pool risk Higher Costs due to inefficiencies Can cover poor better May not be responsive to Client Needs or Locations Often better serve the rich Free services are often not free Ethics of regressive taxes paying for inefficient services

Options for Health Financing: Insurances AdvantagesIssues Pool riskSelection and Moral Hazard Can cover poor betterOften better serve the rich What do you cover How do you get people to go for essential but unwanted services

Options for Health Financing: Incentives AdvantagesIssues Can direct clients to particular services Poor clients may still incur high costs for services they feel necessary but are not covered Can actually promote health rather than just healthcare seeking Availability of services and quality of services Transparency Increase market competition among providers Advantages to health are indirect

Community Insurance and Reproductive Health Some evidence for increase skilled birth attendance (China Cooperative Medical System) Maternal Health, Infant and Child Mortality (Cost Rica), although more in depth analysis shows benefits entirely due to maternal schooling, economic status and location/ proximity to clinics

Issues in Improving Health via Healthcare and Access Approaches Information asymmetry Client costs are from provider (fees and supplies), transport, opportunity – what do you cover Not all care sought leads to health

Vouchers: Bangladesh Vouchers for maternal health services in multiple underserved districts Increased client satisfaction Increased ANC, facility deliveries, PNC but not FP Increased facility use by the poor Decreased differences between poor and rich Rich still used government facilities more than the poor Successes less than anticipated Limited success related to poor service quality and choice

Vouchers: Bangladesh Location: Dijanpour Vouchers for birthing services Increased client satisfaction Increased facility deliveries and EMOC use Increased birthing information

Vouchers: Cambodia Vouchers for in 3 rural districts Increased facility deliveries 3 fold Increase occurred in voucher and self pay clients (slightly more for vouchers) More improvements seen among the poor

Summing it up Demand side financing changes health behaviors +/- provides health financing May help the poor May promote health and progress towards MDGs Limited application unless services are available Experience thus far mainly with covering services/ commodities – not for transport, opportunity costs Sustainability How long does it take to change behaviors?

Challenges Dependency of recipients and misuse Targeting the poor Administrative costs/Quality control Systematic corruption Lack of suppliers Sustainability of demand side financing schemes

Options for Sustained DSF and SSN

Social Enterprise Models Provide subsidized health care based on a revenue generating framework Trained Community Health Entrepreneur (TCHE) in India provides basic healthcare services in rural areas. The Health Entrepreneur is expected to generate their own sales through providing health care services at the doorsteps. Small scale pilots exist such as Packard Foundation’s “Marvi” project in Umerkot with the help of HANDS

Social Enterprise Models AdvantagesIssues Requires less investment Need to train people for leadership and entrepreneurial skills Build self reliance in communities Create and implement strict price controls Workers have incentive to provide service Requires some procurement support for medicines and equipment Workers make effort at convincing people to access health care Will be dependent on the ability and motivation of the worker

Social Franchising Green Star Social Marketing and Marie Stopes International and others have worked through their franchise centers Marie Stopes Society (MSS) - a subsidiary of the Marie Stopes International works through its Suraj Franchise Model in Pakistan to provide IUCD vouchers that can be utilized at Suraj franchises

Social Franchising AdvantagesIssues Increase access for poor and underserved Requires strong monitoring mechanisms Good quality servicesSelection and Moral Hazard Can be run by local health care providers Avoid costs of fixed facilities

Key Questions How can we reach the poor and underserved? How can we identify the deserving? Is there a possibility for public –private partnerships to serve the poor and improve efficiency? Can the public sector fund/subsidize private sector for better service choice and quality? How should we use indigenous knowledge? Can economic development support DSF measures?

Key Questions What are the roles of key macroeconomic variables in supporting and promoting SSN – Education – Employments – Price Stability – Infrastructure Does food security affect SSN? What can be done to improve SSN Conflict and Security concerns? Are vouchers the only solution we have?

Thank You