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Building Public/Private Partnership for Health System Strengthening Vouchers: An Overview

Building Public/Private Partnership for Health System Strengthening Vouchers: An Overview Peter Berman The World Bank Bali Hyatt Hotel, Sanur , Bali 21-25 June 2010. Outline. The key differences between “supply side” and “demand side” approaches

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Building Public/Private Partnership for Health System Strengthening Vouchers: An Overview

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  1. Building Public/Private Partnership for Health System Strengthening Vouchers: An Overview Peter Berman The World Bank Bali Hyatt Hotel, Sanur, Bali 21-25 June 2010

  2. Outline • The key differences between “supply side” and “demand side” approaches • What are vouchers? How do they differ from other “demand side” instruments? • Advantages and disadvantages of vouchers • Examples • Concluding Thoughts

  3. The difference between supply and demand side instruments

  4. ADVANTAGES Simple to introduce Cheap to administer Best when the supplies subsidized can be, or are only used by target groups DISADVANTAGES Difficult to target Reduce incentive to provide services of high perceived quality Reduce incentive to maximize efficiency Supply Side Subsidies

  5. ADVANTAGES Productivity-based remuneration Evidence-based practice Targeting Output-based monitoring and evaluation DISADVANTAGES Higher transaction and administrative costs Over-servicing Cream-skimming Sometimes lower patient satisfaction Demand Side Subsidies

  6. CONSUMER-LED The subsidy is transferred to the consumer, either as cash or as some token of exchange (such as a voucher), either in advance of service provision, or post-hoc as a refund PROVIDER-LED The subsidy is given to the provider based on a contractual arrangement with the funding agent in which there is a direct link between output and the quantity of subsidy received. Provider-led versus Consumer-led Demand Subsidies

  7. SUBSIDIES TRANSFERED BEFORE SERVICE PROVISION Cash transfer payments Contributions to, or tax-rebates on, family medical savings schemes Vouchers SUBSIDIES TRANSFERED AFTER SERVICE PROVISION Cash refunds Examples of consumer-led subsidy schemes

  8. What are vouchers?

  9. A Voucher is: • A demand-side consumer-led subsidy instrument • A token that can be used in exchange for a restricted range of goods or services, either partially (e.g. as a discount) or in total. OR PUT MORE SIMPLY • ‘Tied cash’

  10. A typical voucher scheme in health

  11. Six Scenarios in which the Use of Vouchers Might Make Sense • For targeting subsidies more accurately • For stimulating demand for under-consumed services • For simplifying the administration of demand side subsidies • For reducing provider-induced demand • For providing service packages of fixed or predictable cost • For increasing client satisfaction

  12. Good candidates for targeting with vouchers include: • Groups who operate outside the law (drug addicts; often commercial sex-workers) • Groups that fear stigmatization (e.g. TB patients; leprosy patients; HIV/AIDS patients; men who have sex with men) • The poor, if these can be more accurately identified in the community than at the point of service delivery

  13. Toolkit on Competitive Voucher Schemes in Health Dr Peter Sandiford Dr Anna Gorter Dr Zil Rojas MSc Micol Salvetto “Pre-feasibilty Work and Feasibility Assessment”

  14. Toolkit Content • Supply and Demand Side Subsidies • What is a Competitive Voucher Scheme • When to Consider a Voucher Scheme • HOW TO INTRODUCE • Pre-Feasibility then Feasibility Work • Design (Key Process and Structures issues) • Implementation (Key steps_ • Monitoring and Evaluation

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