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Reproductive Health |
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Issues in the Financing of Family Planning Services in Sub-Saharan AfricaChapter I: Introduction |
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This report addresses major issues related to the financing of family planning services in sub-Saharan Africa by consolidating and analyzing available information, much of which is not published or readily available. It is addressed to policy-makers and program managers in African government and donor agencies active in the health and family planning fields, and aims to identify gaps in the information base that will need to be filled to facilitate policy and program change. A series of policy briefs highlighting key issues is also available (Family Health International, 1999). Unmet need for family planning services in sub-Saharan Africa is large and growing. Even if donor and government funding is projected optimistically, countries will be faced with a large and growing gap between needs and resources. Providing services to meet reproductive health needs beyond contraceptive delivery widens this gap significantly. Eventually, countries will also need to replace donor funds with in-country resources. Failure to take these realities into account encourages the development of service delivery systems that are neither efficient nor sustainable. Even countries with low levels of income and low contraceptive use must begin now to plan for future funding of services. While donor and African government contributions may increase in the short run, we believe that such funds are limited and that other sources of revenue, as well as ways of providing quality services at lower cost, must be identified. Subsequent chapters of this report explore the potential of the following three options:
Chapter II aims to illustrate the large and growing gap between the need for family planning services in sub-Saharan Africa, and the availability of donor and government funds to meet this need. We begin by presenting available information on current and projected needs for family planning services. Next, we estimate the costs of meeting those needs, both today and in the future. We then present data on current levels of government and donor expenditure on family planning in the region. Much of the information available on these topics -- and particularly on future resource requirements and current government expenditure -- is extremely rough. Nonetheless, it is possible to state with certainty that there is a need for additional resources, over and above donor and government funds, to finance current and projected needs for services. Chapter III covers the first of these options: charging or increasing fees to users of public sector and nongovernmental organization (NGO) outlets, so that they pay a higher share of service costs. This strategy should be used with caution, since price increases could discourage those who need services, and particularly the poor, from using them. In theory, means testing systems can protect those who are unable to pay for services. The performance of these systems, with particular reference to the sub-Saharan context, is also evaluated in Chapter III. Chapter IV discusses the second option: encouraging greater use of the commercial sector. The current scope of commercial sector involvement in family planning service delivery in sub-Saharan Africa is explored and contrasted with other regions of the world. The factors that affect commercial sector development are also discussed. Specific attention is paid to the role of for-profit providers, retailers, social marketing, managed care, and employer-based family planning programs. Finally, Chapter V examines the third option: reducing the costs of family planning services. A case study of Kenya is used to demonstrate the limited reliability of available cost information and to illustrate the need for more rigorous research on this subject. The chapter also discusses potential strategies for reducing the costs of family planning services, such as mobilizing underutilized capacity, eliminating unnecessary medical barriers, and integrating family planning and other reproductive health services. Table 1.1. Public-Private Modes of Financing and Delivering Family Planning Services
Source: Tsui et al., 1997. Overarching Issues: Financing The financing context Family planning services can be financed from a number of sources, including fees charged to service users, revenues raised through taxation, and contributions from donors. The mix of these funding sources will vary by type of service provider (Table 1.1 shows the relationship between source of funding and place of service provision). Purely commercial outlets generally cover their costs solely through client fees; in such cases, sales of pills in pharmacies or payments for visits to commercial clinics are not subsidized. Social marketing programs, however, also sell their products at commercial outlets. Since donors often provide some of the funding for these programs, they tend to be partially subsidized. Purely commercial family planning activities are very rare in the sub-Saharan region; donors provide at least some funding for most retail contraceptive services. Ministry of health facilities may be supported through a combination of fees, tax revenues, and donor contributions. Fees generally cover only a small portion of costs, and, in some countries, these services are free. Nongovernmental, not-for-profit facilities may be supported with the same types of financing, though government funding is likely to be more limited or nonexistent. A public finance perspective To what extent are governments and donors obligated to fill the gap between needs and resources? There are several arguments that are made for a public role in the financing of family planning services and activities. Broadly, these can be classified as follows: they are merit goods; they carry positive externalities; they can be used to alleviate poverty; and they are public goods. Each of these ideas is summarized below.1 First, it is argued that contraceptives should be subsidized because they are merit goods, or goods that society believes each individual should have access to regardless of ability to pay. Merit goods include items that satisfy basic needs, such as food, clothing, and shelter; many also believe that family planning services fall within this area of social obligation. "Contraceptives are very strong candidates for the merit goods characterization because they enable individuals to exercise greater control over their reproductive lives" (Desai, 1997). The merit goods argument is possibly the strongest justification for public provision of contraceptive information and services. Second, it is argued that governments and donors should help finance goods with large positive externalities. These goods benefit not only the individual using them, but also society as a whole. Condom provision is an example of a family planning service with large positive externalities, since the benefits of condoms accrue both to the person using them and to others in the community, as a result of reduced incidence of sexually transmitted diseases (STDs). In this case, public subsidies are again justified, because the price charged to individuals for these services will usually result in suboptimal use. According to Desai (1997), the use of contraceptives for general family planning purposes also produces positive externalities by reducing population growth rates, which in turn reduces the strain on public sector social services -- benefiting society as a whole. This argument can be challenged on two grounds: First, as Desai notes, there may be more effective means of reducing the strain on social services than by reducing population growth rates; and second, even if reductions in population growth rates are the best way to reduce the strain on social services, many would argue that population growth is more appropriately and effectively influenced through broad socio-economic development initiatives than through family planning services. An additional argument for public and donor support of family planning concerns poverty alleviation. According to this argument, donors and governments can work toward equity goals by providing family planning services to those who need them, but who would not normally have access to them due to limited resources. The suggested weakness of this argument is that because the cost of obtaining family planning services constitutes only a small portion of any family's budget, public subsidies do not contribute much to alleviating poverty. It can also be argued that by reducing unwanted fertility, family planning services alleviate poverty at the household level. There are, however, more effective ways of achieving poverty reduction goals. In addition, as we will discuss later, it is also difficult to target services only to the poor; subsidies invariably "leak" to the non-poor. Finally, it is argued that governments should finance public goods, or activities that the private sector will either not undertake or will undertake at suboptimal levels because users cannot be charged for them (Tsui et al., 1997). Within family planning activities, contraceptive regulation and testing, as well as the provision of information about family planning, can be defined as public goods. Private providers have little incentive to finance these activities, since associated benefits accrue to all other private providers (Desai, 1997). According to this argument, these activities will be performed at suboptimal levels in the absence of public support. This argument applies only to the regulatory and educational aspects of family planning, however. Public support for contraceptive service delivery cannot be justified using the public goods argument. Overarching Issues: Health Care Context Family planning as a component of overall health care In sub-Saharan Africa, family planning and other health services are generally provided in the same facilities, by the same staff, using the same overall funding stream. There are many reasons, however, for a singular focus on the family planning component of these services, particularly where finance issues are concerned. In many countries, family planning is the dominant component of the integrated service package, due in large part to donor funding priorities. In addition, any discussion of financing must keep in mind that the reasons people use family planning services may differ from their reasons for seeking preventive or curative health care. Individuals tend to see immediate benefits from curative care, and are the sole recipients of those benefits. Preventive care is sought to prevent the probability of future illness. Family planning, on the other hand, is sought to prevent the probability of a future pregnancy. These differences in motivation for -- and the impact of -- using services will influence the extent to which individuals are willing to pay fees, their propensity to seek care from different provider and outlet types, their concerns with service quality, and a range of other relevant factors. Hence, while lessons from the health-care finance literature are referred to throughout this document, our focus remains on family planning. Family planning in the context of health sector reform Since family planning services tend to be provided in the context of general health care, changes in the way health care is managed and financed will have an impact on family planning management and financing. Many countries in sub-Saharan Africa have instituted a process of health sector reform; the specific reform agenda varies from country to country. According to Cassels (1995), it may include the following components:
While a number of these issues are discussed in the chapters that follow, a full analysis of the impact of health sector reform on family planning services is beyond the scope of this document. The interested reader is encouraged to consult Cassels (1995), Aitken (1998), and Standing (1997). A reproductive health approach to family planning services In recent years there have been calls for a reorientation of family planning services from a focus on fertility control to a focus on the achievement of reproductive health and rights goals. This change in the family planning program paradigm has a range of implications for the way in which services are designed and delivered -- as well as the way they are financed. At a minimum, contraceptive delivery services must be provided in a manner that does not compromise reproductive health and choice. This implies, for example, that the full range of contraceptive methods should be made available; that clients should be given full information and counseling to enable them to make the choice of method most appropriate to them; and that women in need of other reproductive health services should be referred to appropriate personnel or facilities. Ideally, contraceptive delivery services should be provided as one of a constellation of other services essential for the achievement of reproductive health and rights, including: safe abortion management; screening for and treatment of STDs, other reproductive tract infections (RTIs), and reproductive cancers; maternity care; infertility management; and a range of other services.2 Improving the reproductive health and rights orientation of services -- whether minimally, by ensuring that contraceptives are provided in a manner conducive to reproductive health, or ideally, by ensuring that women have access to comprehensive reproductive health care -- has profound implications for the costs and financing of services. While this report looks at cost and finance issues related to contraceptive delivery services, we do so with reproductive health goals in mind, drawing to the extent possible on the very limited literature and experience to date in integrating family planning with broader reproductive health services. There is a significant literature on costs and finance issues related to other individual components of reproductive health care, e.g., on STDs and maternity care per se. Reviewing the implications of this literature for reproductive health costs and finance as a whole is beyond the scope of this report. While we are unable, given constraints of time and resources, to develop a strategic framework for reproductive health finance as a whole, this should be made a priority by the U.S. Agency for International Development (USAID) and other agencies. There is an urgent need to assess the costs of integrated reproductive health services -- including but not limited to contraceptive delivery services -- and to identify options for mobilizing the resources required to provide them. Overarching Issues: Regional Diversity Writing a single document on financing options for family planning in sub-Saharan Africa as a whole is a tall order. The region is made up of 45 markedly different countries. It is easy to find cultural, institutional, and historical parallels among countries within anglophone Africa on the one hand, and francophone Africa on the other, or between East Africa and West Africa. Yet each country differs significantly on many of the levels that will affect its options for resource mobilization, including: current financing and service delivery mechanisms; the history and culture of paying for social services; commercial sector policy and laws; available personnel and infrastructure; coverage of family planning services; culture of family planning use; and income levels. We examine the implications of these differences wherever the literature permits -- which is less often than we would like. Needless to say, the conclusions we draw should be interpreted with due regard for any specific country context.3 Footnotes
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