Competitive Voucher Schemes for Health

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Competitive Voucher Schemes for Health

• Anna Gorter
• Julienne McKay

Instituto CentroAmericano de la Salud ICAS
How can private providers be engaged in serving
the poor? 6th World Congress on Health Economics
iHEA July 9, 2007
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Outline of presentation

• What are competitive voucher schemes
• Strengths of competitive vouchers in developing
  countries
• Comparison of vouchers with
• franchising programmes
• subsidized health insurance
• Conclusion, can vouchers be used to engage
  private providers in serving the poor?

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Why engage private providers through competitive
vouchers?

• Market failure to serve certain poor,
  marginalised and / or vulnerable populations,
• even if services are associated with positive
  externalities, e.g. HIV/AIDS services for sex
  workers
• Search for alternative approaches engagement of
  private providers through competitive vouchers
• 1995 - 1998 voucher trial with sex workers in
  Managua successful
• Development of more schemes in Nicaragua

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SUBSIDIES Eg. Tax revenue or donation
PROVIDER ORGANIZATION Eg. MoH, Social Security,
other.
PAYMENT ORGANIZATION Eg. Voucher Agency
RIGHT TO SUBSIDY Eg. Vouchers, capitation
payment, fee subsidies
INPUTS Eg. Salaries, Drugs, etc
Payments
PROVIDERS
USERS
Invoice for Subsidies on Goods and /or
services
Free or subsidized services
Redemption of the right for subsidy
Co-payments
USERS
PROVIDERS
SUPPLY SIDE FINANCING
DEMAND SIDE FINANCING
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Competitive vouchers in other sectors

• Education (US, Europe, LA, Netherlands)
• Employment (Argentina, US, Netherlands)
• Training (LA, Kenya, Zimbabwe, USA)
• Elderly care (Spain)
• Housing (USA)
• Pension (Bolivia)
• Welfare (UK, USA)

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Competitive voucher scheme in health
Voucher agency
Voucher

ME reports
Training plus performance monitoring
Voucher recipients

Donor/ Government
Voucher
Service Providers (compete for vouchers)

Voucher
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Some examples of vouchers
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Strengths of competitive vouchers

• Targeting of population sub-groups
• Encourage use of specific services
• Can increase operating efficiency
• Can improve service standards / quality
• Payment for services actually provided
• Possible to pay only incremental cost
• Facilitates monitoring and evaluation

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Targeting

• Of identifiable groups at risk / in need
• Marginalised groups
• drug-addicts, sex workers, streetkids
• Groups who fear stigmatization
• MSM, or people with TB, Leprosy, AIDS
• Vulnerable groups, e.g. because of age, gender,
  behaviour or poverty
• Adolescents, young people
• Clients of sex workers
• Poor pregnant women

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Encourage use (incl. of services with positive
externalities)

• When demand is limited by barriers to access
  (cost, lack of knowledge, stigma..)
• Vouchers inform about services and guide users to
  where services can be obtained
• Remove cost barriers (incl. eg transport costs)
• Power of choice increases client satisfaction
• Encourages use and positive experience leads to
  repeat use
• Worth of mouth recommendation to others

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Nicaraguan schemes target those most at risk or
underserved encourage use

• STI-HIV-AIDS prevention treatment
• sex workers and their clients
• men who have sex with men
• Sexual Reproductive Health care
• poor adolescents and young people
• Cervical Cancer screening and treatment
• older women in rural and remote areas

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Other schemes target and encourage use of safe
motherhood services

• Providing safe motherhood services through
  vouchers to reduce maternal mortality (MDG5)
• Indonesia services delivered by private midwifes
  to poor rural women
• Kenya services delivered by public, private
  mission providers to poor women
• India / Gujarat private gynaecologists provide
  services to poor women from remote areas
• India / Uttar Pradesh, private nursing homes
  provide maternal care to poor women

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Vouchers can increase efficiency service
standards

• Increased utilization of private sector resources
• Reduced input costs
• Competition between participating providers
  (private, NGO/mission, public)
• Reduced price
• Increased service quality
• Increased clients satisfaction

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When do vouchers increase efficiency / standards
most?

• Providers with excess capacity, increased
  utilization gives economies of scale
• Strong competition between providers (more than
  one provider available)
• Where contracts specify best practice service
  package /social protocols staff required to
  undergo training
• only cost-effective services are provided
• medical supplies are procured centrally
• vouchers are distributed by third parties

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Potential drawbacks of vouchers

• High start-up costs
• Set-up is complex, needs highly trained staff at
  the start, devil in the detail
• Not feasible cost of services is variable or
  unpredictable need for services difficult to
  verify
• May be susceptible to abuse (black market,
  collusion between providers and distributors..)
• Program development takes time
• Once established easy to run and to scale-up, and
  costs go down

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Vouchers facilitate monitoring and evaluation

• Mechanics of a scheme incorporate
• Regular monitoring of provider performance
  against contract specifications
• Interviews with redeemers, mystery patients
• Medical record review
• Tracking redemption rates / follow-up
  consultations
• Providers report to voucher agency
• Voucher agency reports to donor/Government
• Program impact assessed by tracking voucher use
  and linking changes to health outcomes

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Impact of treatment rounds on STI prevalence in
sex workers voucher scheme in Nicaragua (long
periods between treatment rounds high bounce
back of STIs)
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Measured STI Prevalence
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Round
McKay et al, AJPH 2006967-9
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Effect of voucher scheme GujaratOver 40,000
Institutional Deliveries in 5 pilot districts,
Jan 2006 March 2007
Dr. A Singh, Voucher Workshop April 2007,
Gurgaon, India
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Comparison of vouchers with franchise and
insurance
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Combining vouchers with a franchise
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Vouchers useful in engaging private providers to
serve the poor?

• Vouchers are complex to set up, more
  experience is needed. They are highly successful
  in targeting needy populations and encouraging
  them to use priority health services. Great
  potential in eg.
• - HIV/AIDS prevention in groups most at risk
• - Reduction of maternal mortality in poor women
  
• Voucher schemes have been successful, also
  because they could tap into private sector
  resources and engage private providers in serving
  needy populations with health care services they
  had been unable to obtain before.

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Conclusion

• Vouchers can be a good way to target public
  subsidies to specific populations and encourage
  them to use priority health services provided by
  private providers.
• Use of vouchers in conjunction with franchising
  may generate stronger returns, however not much
  practical experience exists and experiments on a
  small scale are needed.