Fee exemption policies for maternal health care: some issues from the field of health

economics

Technical workshop on the benefits package for fee exemption policies for maternal health services – Bamako 17-19 November 2011

Bruno Meessen & Matthieu Antony

Objectives

• “Free” care has several merits, but it also has a cost.

• Identify some key issues relating to health economics and provide food for thought on fee exemption policies.

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Methodology

• Questionnaire developed by the FEM Health team with validation by the workshop organizing committee (2 parts: content and funding)

• Pre-test in Burkina Faso• Sent to all countries that participated at the

workshop by email to a key informant at central level

• Follow-up by telephone and email• Comparative analysis of 11 sheets

How to allocate resources?

The determinants of budgetary weight of exemption policies

• The targeted population and fertility rate as a crucial factor• The range of services included in the policy• The costs covered by the policy

Exemption policy coverage

Different criteria, different winnings

Criteria: support by citizens (benefits, justice)

Criteria: protection against catastrophic expense

Key question: which is the optimal cube in terms of winnings for populations (possibly with different weights), givens limited resources, systemic issues and dynamics?

Criteria

: cost-effectiveness

Exemption policy

coverage

Year 2010 Morocco Ghana Burundi Burkina-Faso Kenya Nigeria Sierra Leone Senegal Mali Niger Benin

Amount allocated to maternal health care funding (in PPP$) - - 10 410 789 - - - - - 6 657 455

(2009)4 847 560

(2009) 8 689 281

Amount allocated to maternal health care and newborn funding (in PPP$) 62 876 604 - - 14 410 789 8 897 766 - - - - - -

Amount allocated to maternal health care and children under 5 years funding (in PPP$) - - 27 355 978 - -

59 471 658(nov 2008-june 2010)

11 673 382 - - 17 223 343(2009) -

Antenatal care

Delivery

Episiotomy

Complication during pregnancy DC DC DC

Complication during labour

Caesarean section

Other surgeries Hyster. Hyster. Hyst+Ect.P Hyst+Ect.P

Postnatal care

Postnatal Complications

Postnatal family planning

Simple post-abortion care

Complicated post-abortion care

Newborn care

DC = Directs obstetric ComplicationsHyster = hysterectomyEct.P = Ectopic Pregnancy

Covered by another exemption or subsidy policy

Example : estimation of unit cost of C-Section

Benin Burkina Faso Morocco Senegal Kenya Niger Mali0

50

100

150

200

250

300

350

400

450

Estim

ated

uni

t co

st o

f Cae

sare

an s

ectio

n (in

PPP

$)

Available fiscal space, political commitment

Sources : authors' calculation

0 500 1000 1500 2000 2500 3000 3500 4000 4500 50000

0.5

1

1.5

2

2.5

3

3.5

Burkina Faso

Morocco

Kenya

Burundi

Niger (2009)

Sierra Leone

Nigeria (Nov 2008- Juin 2010)

BeninBurundi

Mali (2009)

Niger (2009)

Exemption policy cost/Capita and GNI/Capita (in PPP$) in 2010

Maternal health care funding Maternal and children under 5 years care funding Maternal and newborn care funding

GNI/Capita

Exem

ption

pol

icy

cost

/Cap

ita

Resource mobilization

• State budget only

– Benin– Burkina Faso– Ghana– Morocco– Nigeria– Senegal

• State budget and Foreign aid

– Burundi– Kenya– Niger– Sierra Leone

Share of foreign aid in the exemption policy funding

Burundi Kenya Niger Burkina Faso0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

World BankEuropean Com.Belgian Coop.

NGOs

KfW

AFD

UNFPAWHO

UNICEF

State Foreign aid

Features of foreign aid

• The aid is mainly but not only monetary…– Niger : aid is monetary and non-monetary (drugs, contraceptives,

transport in the case of referrals)

• Multiplicity of donors – Sierra Leone : DfiD, World Bank, AfDB, UNFPA

• Donor commitment?– Burundi and Kenya: funding commitment from donors until 2014– Niger and Sierra Leone : Donor commitment does not specify

duration– Burkina Faso : no commitment

=> Sustainability of policy funding an issue?

Forecast versus actual disbursements in 2010

* Maternal health care only

Burundi* Kenya Benin Burkina Faso0

4000000

8000000

12000000

16000000

Forecast expenditureAmount disbursed

How to compensate providers for delivering “free” services?

The incentives issue

The issue

• User fees are a mechanism for rationing scarce government resources (and development partners) but are also part of a set of incentives for providers

• By removing it, (1) set up another system of incentives; (2) exposure to another form of rationing (stock-outs, burn-out…)

Incentives / Effects• For users:

– Access– Distortion that may shift demand (i.e. Benin).

• For providers:– Effort in terms of quantity of services produced– Effort in terms of quality of services provided to users – Effort in terms of the management of resources within health facilities or the

health system– Effort in terms of reporting

• For donors:– Effort in terms of resource mobilization– Effort in terms of disbursement

Funding arrangements

BurundiGhanaBurkina FasoKenyaNigerBeninSierra LeoneNigeriaMaliMorocco*Senegal**Annual prepayment (in regional hospitals only in Senegal)

Impact on drugs supply: « push » or « pull »? Parallel system?

Supply of kits

Care reimbursement

Care reimbursement and supply of kits

Care reimbursement and capitation payment

Different approaches to fixed fee

• Unique fixed fee regardless of level of care (Benin, Mali, Morocco, Nigeria).

• Fixed fee depending on level of care (Niger, Ghana*). * In Ghana's case this depends on the ownership of the facility as well as the level.

• Kenya : fixed fee depends on ownership of health facility (public, faith-based / NGO, private for profit).

• Burundi : one fixed fee but «equity bonus system».

• Burkina Faso : reimbursement of health facilities based on the actual cost of care.

Key question: Does the fixed fee cover marginal cost? Does it take into account staff motivation? What effects, distortions?

Performance-Based Financing: interesting option?

• Combination between selective free and Performance-Based Financing (Burundi).

• Principles:– A purchasing agency offsets each patient accepted according to a standard

fee that builds in an amount for staff incentive.– Compensation can be a criteria in terms of quality of care.– Facility has enough autonomy to decide on the use of resources (i.e.

Burkina Faso). – A verification agency checks the physical reality of the benefits reported.

• Difficulty: assessing the quality of maternal health care (Caesarean section)

Frequency of reimbursements/prepayments

MoroccoSenegalSierra LeoneKenya*BurundiGhanaNigerBeninMali (kits)Burkina Faso* Normally on a monthly basis

Mali (reimbursements)

Nigeria

Are there any delays in the reimbursement of health facilities that threaten their financial health (debt accumulation)?

AnnuallyBiannuallyQuarterlyMonthlyAt the discretion of the facility

Conclusion

• “Free” care through fee exemptions has a significant cost to governments. Crucial issue!

• We are looking for the optimal system. It is important to explain the decision criteria. Some options raise questions.

• There is no single funding strategy for exemption policies.

• Don’t neglect the accompanying measures and the key role of incentives => Importance of formulation phase (design!) and implementation.

• Need for a good information system to correct the adverse effects.