Financial incentives for maternal health: Impact of a national programme in Nepal

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Abstract

Financial incentives are increasingly being advocated as an effective means to influence health-related behaviours. There is, however, limited evidence on whether they work in low-income countries, particularly when implemented at scale. This paper explores the impact of a national programme in Nepal that provides cash incentives to women conditional on them giving birth in a health facility. Using propensity score matching methods, we find that the programme had a positive, albeit modest, effect on the utilisation of maternity services. Women who had heard of the SDIP before childbirth were 4.2 percentage points (17 percent) more likely to deliver with a skilled attendant. The treatment effect is positively associated with the size of the financial package offered by the programme and the quality of care in facilities. Despite the positive effect on those exposed to the SDIP, low coverage of the programme suggests that few women actually benefited in the first few years.

Introduction

Access to priority health services in low-income countries remains vastly inadequate. Nowhere is this more obvious than in maternal health. According to a widely cited paper by Campbell and Graham (2006), a strategy in which women give birth in primary care institutions with effective referral is key to improving maternal health. Yet, improvements in the coverage of professional care at childbirth has stagnated in Sub-Saharan Africa and South Asia over the past decade, in part, because the provision of and the reluctance to use maternity services are inextricably linked to deep-rooted issues such as the state of the health system and the place of women in society (Koblinsky et al., 2006). Because professional care at childbirth is often used as a broader proxy for the state of a health system (Rohde et al., 2008), these trends raise concerns beyond maternal health.

In response financial incentives have been increasingly advocated as an effective means to change health-related behaviours and improve health outcomes (NORAD, 2007). If households lack the financial resources, heavily discount the future or lack information on the benefits of health care to make optimal care seeking choices, financial incentives can increase demand for health care. Financial incentives are the key feature of various programmes that have become popular in recent years, including conditional cash transfers, vouchers and one-off cash payments.

Financial incentives provide an immediate reward to individuals for behaviour that leads to health gains, and have been used to target a range of health-related behaviours. Recent enthusiasm for their use in low and middle income countries is supported by evidence showing that payments aimed at initiating take up of preventive health interventions can be effective (Lagarde et al., 2007). However, there is also limited evidence of perverse effects.1 Financial incentives have been used in a positive sense, to encourage uptake of health technologies and attendance at health clinics (Fiszbein et al., 2008). More controversially perhaps, they have been used to encourage individuals to refrain from certain behaviours, such as contracting sexually transmitted diseases (Jack, 2008).

In this paper we explore the effect of a national financial incentive programme for maternal health in Nepal. Despite a recent improvement in maternal mortality in the country, utilisation of maternity services has remained unacceptably low (Pradhan et al., 1997, Government of Nepal, 2001, Government of Nepal, 2007). The Government of Nepal thus turned to the use of financial incentives. Introduced nationwide in July 2005, the Safe Delivery Incentive Programme (SDIP) provides: (i) a cash payment to women who give birth in a public health facility; (ii) exemption from user fees for those residing in the least developed one third of districts; and (iii) a financial incentive to health workers. The incentive to health workers is given for attendance at deliveries both in the health facility and at the home of the woman giving birth (Government of Nepal, 2005). As shown in Table 1, the amount of cash was designed to vary across the three main geographical regions of Nepal to reflect differences in the cost of accessing health services faced by households (Borghi et al., 2006a). The development of the SDIP and its rapid adoption was heavily influenced by a convergence of political interests and effective dissemination of research findings supporting the notion of financial incentives (Ensor et al., 2009). At the time, the coalition government was headed by the United Marxist Leninist party who, in their manifesto, had pledged support to advancing the status of women.

We focus on estimating the effect of the SDIP on women's use of health care services at childbirth. The cost of maternity care faced by households can be high, with the majority of expenditures made outside of the health facility (Borghi et al., 2006b). By reducing these costs, the SDIP is expected to lead to improved health seeking behaviour at childbirth. We estimate the magnitude of the effect on use of formal care and then seek to understand whether the benefits of the SDIP vary according to characteristics of the target population and the design of the programme. Variation in the package of financial benefits across regions, for example, provides an opportunity to explore whether the size of the incentive makes any difference to the impact of the programme.

Our empirical strategy relies on an unusual measure of treatment, namely the woman's knowledge of the SDIP prior to childbirth, and propensity score matching methods to estimate the causal impact of the programme. Identification rests on the strong assumption of conditional independence and, for this reason we explore a number of approaches to assess the robustness of the basic findings. Over our study period, implementation was characterised by lengthy delays in the disbursement of funds from the central level and hesitation on the part of the government to promote the programme using mass media (Powell-Jackson et al., 2009a). As we argue later, the extent of implementation must be given consideration when interpreting the findings.

The paper contributes to the growing literature on demand-side incentives in health. However, there is little rigorous evidence on whether financial incentives work in low-income countries, particularly when implemented at scale. The available evidence comes largely from middle-income Latin American countries, where health services are available and government financial systems relatively strong. This paper also informs the debate on the feasibility of implementing financial incentive programmes in resource-poor settings. While the notion of paying individuals to influence their behaviour is simple and intuitively appealing, our findings suggest that such interventions can be complex to implement (Oxman and Fretheim, 2008).

The paper is structured as follows: Section 2 considers the main theoretical mechanism underpinning the SDIP in formulating predictions as to its effect. Section 3 describes the methods, including our definition of treatment, the empirical strategy and the data used in the study. Section 4 presents the findings and Section 5 discusses the main implications and limitations of the study.

Section snippets

Theoretical considerations

We start with a conceptualisation of the pathways through which the SDIP can be expected to improve outcomes, in an effort to make explicit the assumptions that underpin the process (Weiss, 1998, White and Masset, 2007). This leads us to identify a number of steps that can be considered necessary if the programme is to lead to a change in health seeking behaviour. It also allows us to make the distinction between individual actions and government involvement in the implementation process and

Defining treatment

Implicit in the archetypal evaluation problem with a binary treatment is a clear definition of the treatment status of each individual in the population of interest. The most common way of defining treatment uses enrolment status, eligibility status or geographical placement of the programme. In this study, all three were ruled out owing to the nature of the programme and the fact that it was launched nationwide from the outset.

Instead, the study design is informed by the model of the

Effectiveness of implementation

To provide some context behind the impact results, we first examine how well the programme was implemented. Two measures are particularly revealing. The first concerns awareness of the SDIP among the target population. Just under a quarter (24.3 percent) of women in our sample had knowledge of the SDIP prior to childbirth. This estimate implies that three-quarters of women were not reached by the programme and their health seeking behaviour could not plausibly have been influenced by the offer

Discussion

This paper finds that the SDIP had a positive impact on the utilisation of maternity services. Women in the treated group were 4.3 percentage points (26 percent) more likely to deliver in a public health facility, 4.2 percentage points (17 percent) more likely to deliver with a skilled birth attendant and 1.2 percentage points (36 percent) more likely to have a caesarean section. There was evidence, albeit weaker, that the SDIP encouraged women to substitute from NGO hospitals to give birth in

Conclusion

In this paper we find that a national programme offering financial incentives to households was modestly effective in encouraging women to deliver with professional care in six districts of Nepal. The impacts appear to be modified by the size of the financial package relative to the cost of care and the quality of care provided in hospitals and primary health care centres. Owing to the low coverage of the SDIP, a small proportion of the population were incentivised by the programme to seek

Acknowledgements

We have benefited enormously from discussions with Anthony Costello, Anne Mills, Suresh Tiwari, Basu Dev Neupane, Louise Hulton, Greg Whiteside and seminar participants at iHEA, Oxford University and University College London. We thank the dedicated group of individuals involved in the data collection. The study was funded by the Department for International Development through the Support to Safe Motherhood Programme in Nepal (managed by Options UK). Financial support from the ESRC and MRC is

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