Reproductive health and health financing Barbara McPake, London School of Hygiene and Tropical Medicine

The main sources of finance for reproductive health services Public tax-based revenues Households’ out-of-pocket expenditures Employers’ contributions to health insurance External donations

Sources of finance: Bangladesh

Sources of finance: Uganda

Sources of finance: South Africa

Sources of finance: Peru

Sources of finance: Thailand

Sources of finance: Russia

The advantages of pooling Pooling creates important opportunities for sharing risks between healthy and sick; rich and poor If funds are earmarked, reallocation to more cost-effective services is constrained The wider the risk pool, the more opportunities there are for cross-subsidy

Pooling to redistribute risk and cross- subsidy for greater equity ContributionNet transferUtilisation Pooling Low High RISK Subsidy Low High INCOME Source: World Health Report, 2000

Public finance Generally offers greatest potential to pool resources and risk However, potential rarely achieved –Resources allocated to low priority investments and interventions –Health and wealthier individuals receive more than their fair share: access; staff attitudes; patient choices –Resources concentrated in high level health facilities and towns

The hidden cost of ‘free’ maternity care in Dhaka, Bangladesh Source: Nahar and Costello, Health Policy and Planning, 1998

Public spending: Do the poor benefit? Source: Castro-Leal et al., Bulletin of WHO,2000 Poorest 20% Richest 20% % of public health expenditure consumed

User fees in the public sector Additional revenue Potential to improve quality of services Potential to apply cross-subsidies BUT Deterrent effect of fees on utilisation Difficulties of implementing effective exemption schemes

Do user fees deter family planning? Individuals are not very responsive to changes in price of contraceptives (eg. Thailand, Philippines, Jamaica, Bangladesh) As the price of contraception increases, the price elasticity of demand increases Choice of contraceptive method and provider is sensitive to price The probability that contraception is used declines as distance to health facilities increases (Source, Levin et al. Social Science and Medicine, 1999)

The effect of user fee increases on STD treatment Attendance at STC clinic (seasonally adjusted) 1=Attendance in user charge period as % of pre-charge period 2=Attendance in post charge period as % in pre-charge period Source: Moses et al., The Lancet, 1992

User fees in the private sector Private sector has flexibility in the operation of fee scales Poorer consumers use formal primary level private providers and the informal sector Higher prices do not always mean better quality The private sector is the main recipient of expenditures made by the poor

User fees and maternity services Prevention of maternal mortality network (range of country studies in West Africa) After fees: Normal deliveries  Complicated deliveries  or  The ways fees applied affected these trends Poor quality of care was most important factor in case fatality rate Source: Prevention of Maternal Mortality Network, Social Science and Medicine,1995

Sites where people with STD symptoms had received medicine before attending public health centres Source: Faxelid et al., EAMJ, 1998

Why the poor pay more Source: Fabricant et al. Int. J. Health Plann. Mgmt, 1999 Expenditure by provider: Sierra Leone

Why the poor pay more cont’d Source: Fabricant et al.

National insurance programmes Can seldom achieve universal coverage –Restricted formal sector employment –Limited government ability to subsidise rest Subsidy to national insurance tends to entrench inequity Risk sharing and cross-subsidy restricted to within middle and upper income groups

Informal employment Urban, informal, nonagricultural employment in Latin America, 1990 and 1994 Source, Creese and Bennett, World Bank, 1997

Community based insurance programmes Community based insurance might do better –eg. Bwamanda, DRC enrolls 65% of population – potential in urban maternal programme, Mexico BUT Remaining inequities in this successful and heavily externally supported programme Little use of sliding scales and exemptions Cost of premiums still very high

Bwamanda hospital insurance, DRC Evolution of membership in the early years Source: Moens et al., 1990

CIMIGEN: a pre-paid package of antenatal care in Mexico City Stratification of prices by income group based on willingness to pay survey Uptake apparently price responsive Quality of care good Demand rather low Failure to compete with public sector for low- income women Attempt to cross-subsidise limited the market for middle income women

External sources of finance Not clear to what extent services financed by bilateral agencies, charities, NGOs achieve more equitable distribution Where external financing channelled through government, it presumably achieves the same distribution Some NGOs aim to improve equity by locating facilitites in under-served areas

Conclusions No ‘quick fixes’ in financing policy Improving impact and distribution of public finance depends on other reforms eg. strategic purchasing Additional sources may sometimes offer ways of increasing revenue but carry important equity risks We have given limited attention to the role of fees and insurance in the private sector