Conditional Cash Transfers for Improving Utilization of Health Services Health Systems Innovation Workshop Abuja, January 25 th -29 th, 2010

Conditional Cash Transfers (CCTs) Cash transfers are conditioned when in addition to satisfying a selection criteria, beneficiaries are required to regularly undertake some pre-specified action CCTs  Government programs that transfer cash to poor families on the condition that those families make investments in human capital, usually: ▫Sending children to school regularly ▫Taking children to regular health and nutrition check ups

For example –Colombia The program transfers about US$40 per month (about 30% of household consumption) to extremely poor families with children less than 18 living in rural areas To receive the transfers: ▫Children 6-18 have to attend school regularly (85%) ▫Children less than 6 have to be taken to health centers every two (0-1) or six months (2-5). Transfer has two parts: ▫A single transfer if the family has children less than 5 ▫Additional transfers for every school age child

Objectives Two broad objectives: ▫Short-term: support household consumption/income protection ▫Mid-term: accumulate human capital and break the intergeneration transmission of poverty Specific objectives depend on the defined sector goals (e.g., schooling, health status, nutrition)

Rationale Cash Transfers to ▫Help poor families to access basic services ▫Create incentives to change behaviors CCTs reach their long-term goals by boosting demand for specific social services Therefore, CCTs make sense only if supply of social services is available for, and reachable by beneficiaries

CCTs are effective to reach the poorest…

….help them to improve their consumption Colombia: higher consumption of proteins (milk, meat, eggs) and cereals; and children cloths. No evidence of additional consumption of alcohol or goods for adults In Brazil, 60% of the transfer spent in food; in 75% of families enhanced variety of food, increased the number of meals, and improved quality of food (more proteins).

CCTs assisted families to use health facilities for their children… ▫Growth monitoring check ups  México (+30-60%), Nicaragua (29%), Honduras (+12-20%), Colombia (+23-30%) ▫Visit to clinics  Colombia: (+30% (0-2), +50% (2-4)), Honduras (+20%) ▫Pre-natal check ups :  México (+6%), Honduras (+19%), Brazil (+6%)

…helping to reduce stunting… In México, beneficiary children are 1cm taller than non-beneficiaries after 2 years In Colombia and Nicaragua stunting among beneficiaries is 6.9 and 5.3 percentage points lower In Brazil, after two years of exposure to Bolsa Familia birth weight is approximately 200 gms more among beneficiaries.

… and increase immunization coverage Colombia: +9% (DPT3) Honduras: +7% (DPT3) Nicaragua: +18% (full) Turkey: +14% (full) (difference between beneficiaries and non-beneficiaries)

Key implementation issues: The CCT basic cycle Program objectives and expected outcomes Define target population Define conditionalities Registry of beneficiaries ( and information system ) Selection of beneficiaries Beneficiaries comply with conditions Program monitors and verify compliance Program authorizes payments Beneficiaries receive payment

Targeting Selecting beneficiaries of the program ▫Depends on the objectives of the program and the conditions ▫Windows of opportunities How ▫Geographical ▫At household level (Proxy means tested) ▫Community participation

Conditionality Simple Easy to understand by beneficiaries Easy to monitor Linked to transfer

Registry of Beneficiaries At the core of the program Data base with all the information of all beneficiaries (surveys) Needs to be updated Basis for monitoring compliance with conditions and authorizing payments

Verification of conditionalities Central issue to a CCT program May be difficult and expensive, but critical for the credibility and impact of the program Close coordination between Ministries and implementing agencies Following and support to families that fail to comply

Information CCT programs require a careful management of information ▫Large CCT programs require to manage considerable amount of information regularly (e.g., Brazil -10m payments per month; Mexico: 5m payments every two months) ▫Information of compliance with conditions ▫Information on non-compliant families

Benefits and payments Single transfer per family or per eligible member High enough to be an incentive Low enough to avoid interfering in household decisions on labor options Frequency is key to keep families aware of conditionality and change behaviors Clear definition and application of consequences for families that fail to comply

Other implementation issues Institutional coordination (horizontal and vertical) Transparency in the operation: using banking system to transfer cash to families Community feedback Monitoring and evaluation to adjust program Exit and link with other strategies

Gradual expansion Most programs started from small and simple interventions… ▫Only selected areas ▫Straightforward and simple conditions ▫Categorical targeting … for several reasons… ▫Lack of supply of social services, ▫Institutional capacity at central and local level ▫Adjust the program and ensure credibility … and nationwide expansion is a mid-term process (if at all)

21 Size of the program Annual program budget as % of GDP

Amount of the benefit % of household consumption

Concluding remarks Start simple but complete CCT instruments to reach its goals ▫Targeting ▫Conditionalities ▫Benefits Critical elements ▫Available supply of services ▫Regular monitoring of compliance ▫Information