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

1. 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

2. 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.

3. 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 3

4. How to allocate resources?

5. 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

6. Different criteria, different winnings 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? Exemption policy coverage Criteria: cost-effectiveness Criteria: support by citizens (benefits, justice)

7. Covered by another exemption or subsidy policy DC = Directs obstetric Complications Hyster= hysterectomy Ect.P = EctopicPregnancy

8. Example : estimation of unit cost of C-Section

9. Available fiscal space, political commitment

10. Sources : authors' calculation

11. Resource mobilization • State budget only • Benin • Burkina Faso • Ghana • Morocco • Nigeria • Senegal • State budget and Foreign aid • Burundi • Kenya • Niger • Sierra Leone

12. Share of foreign aid in the exemption policy funding

13. 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?

14. Forecast versus actual disbursements in 2010 * Maternal health care only

15. How to compensate providers for delivering “free” services?The incentives issue

16. 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…)

17. 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

18. Funding arrangements  Impact on drugs supply: « push » or « pull »? Parallel system?

19. 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?

20. 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)

21. Frequency of reimbursements/prepayments Mali (reimbursements) Nigeria Are there any delays in the reimbursement of health facilities that threaten their financial health (debt accumulation)?

22. 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.