Can health vouchers help vulnerable groups?

Vulnerable groups such as poor people and the disabled often benefit less from public health spending. Increasingly, governments are investing in consumer-led demand side financing systems (CL-DSF), whereby specific services can be obtained by vulnerable groups through the use of mechanisms such as government vouchers. There is limited evidence of the success of such schemes.

CL-DSF has the potential to encourage competition and betterquality among accredited providers of services and improve the access ofvulnerable groups to such services. Vouchers and other demand side financingmethods have been used in the USA,Europe, and some low- and middle-income countries for awide range of services including health, education, public housing andessential food.

A report from Oxford Policy Management in the UKexamines the costs and benefits of developing CL-DSF in low-income countries. In Tanzania a discount voucher forinsecticide treated bed-nets targets poor, pregnant women; in China’s Yunnan Province vouchers allow poor pregnant womenfree hospital services; in Mexico essential services have beenextended to poor populations through cash subsidies to households conditionalon using basic health and education; in India’s Andhra Pradesh, poor women areoffered a financial incentive to give birth in a public or private healthfacility.

Thoughevidence is not strong, research findings include:

• CL-DSFin the health sector can increase the use of services, as in the examples abovefrom India, Mexico, China and Tanzania.
• Suchschemes can be cost-effective, as in Tanzania.
• InNicaragua distribution of vouchers to sex workers andtheir clients reduced rates of syphilis and gonorrhoea.
• Thereis little evidence that CL-DSF has improved the quality of services.
•  In countries that have pioneered demandfinancing (the USA and some Latin American states)there is concern that such schemes mainly benefit higher income groups since serviceproviders tend to work in areas with a denser, wealthier population.
• Comprehensivelicensing of private providers has often been ineffective in low-incomecountries, where there is little incentive for providers to meet minimumstandards.

The reportadvises low-income countries to:

• considerselective accreditation of providers able to use a voucher scheme to regulate thesupply of services
• examinewhether benefits can be obtained at a lower cost through some other financingoption
• evaluatethe costs of creating an organisation for assessing and allocating vouchers,accrediting facilities and paying providers
• realisethat consumer-led financing is most likely to succeed when applied toincreasing use of specific and easily identifiable services
• startpilot schemes for patients with predictable needs – pregnant women, newborninfants, those at risk from sexually transmitted diseases and sufferers of malaria,tuberculosis and other diseases that take time to treat
• beaware that providing services free of charge does not guarantee use where thereare other barriers to access: for example, patients needing to attend clinicsfrequently will need help with transport.

Developingdemand side mechanisms that go beyond the basic services will require a system ofvouchers for insurance, but the rudimentary nature of insurance markets indeveloping countries makes it unlikely they would be able to offer competitiveservices.