2nd Conference of the African Health Economics and Policy Association (AfHEA)Saly – Senegal, 15th - 17th March 2011

Promoting universal access to health services in post-conflict situations: what

role can large scale cash transfer programmes play for better outcomes?

Sylvain Nkwenkeu, CREPPEMUniversity of Grenoble

2nd Conference of the African Health Economics and Policy Association (AfHEA)Saly – Senegal, 15th - 17th March 2011

Context and rationale: the DRC case1. Large differences in health outcomes between different socio-

economic groups and regions : while 52% of U5 in rural areas were chronically-malnourished (stunted) in 2007, prevalence was 36% in urban areas.

2. The situation is still unstable and volatile, conducive to deterioration in the quality of health services and grave inequity in access to basic social services.

3. For health-related MDGs, the Country is still struggling to reach the pre-1990 levels

Trends in underweight

32.319,6

31.126

15101520253035

1990 2001 2007 2015

% dof U

5

Trends in mortality among U5

213220

185

148

6650

100

150

200

250

1990 2001 2007 2015

U5 M

orta

lity

rate

DRC: is there a correlation between underweight and U5 mortality?

Equateur 247

Katanga 227Kasai Occidental 230

Orientale 241

Bas Congo 221

Maniema 205

Sud Kivu 249

Nord Kivu 237

Bandundu 164

Kinshasa 133

Kasai Oriental 210

Equateur 29.2

Katanga 20.2

Kasai Occidental 30.3

Orientale 21.4

Bas Congo 25.6

Maniema 18.1

Sud Kivu 30.8

Nord Kivu 20

Bandundu 27.8

Kinshasa 14.8

Kasai Oriental 30.8

Underweight U5 mortality

Problem analysis 77% of the children in the country live below the poverty line

(0.72 US$/day) The domestic demand of health services (health service

utilization) was hampered : as a result, morbidity and mortality remain high Underweight (%, mod & severe) : 24.2 / 45.5 Under-five mortality rate (U5MR) of 148 out of 1,000 live births

The health system is more focused on the medical model, and obscures the determinants of community health

The government welfare mechanism is focused on employment, excluding the most needy (poorest, unemployed and rurals).

60-70% of the population lost their livelihoods mainly focused on agriculture (capabilities for a minimal functioning)

There is a need for human capital accumulation to increase the ability of the community to produce, improve child and infant nutrition and therefore reduce child morbidity and mortality

*DHS 2007, unless otherwise stated

Problem analysis

195

88

7

257

91

25

341

98

33

358

205

19

0

100

200

300

400

2006 2007 2008 2008

EducationHealthSocial Affaires

Amount allocated per capita to health care and education from 2004 to 2008 (U.S. $)

DRC expenditure by sector from 2006 and 2008 (in million US$)*

*Source: Based on empirical calculations of data communicated by the Direction of Preparation and Follow up of the Budget, Ministry of Budget, 6 February 2009 (Exchange rate based on the UN rates)

Impact of the abolition of user fee on HCU

Source, UNICEF, 2004

Towards the MDGs: the CAF as an innovative tool

Country Assistance Framework(90% ODA)

Other Official

Development Assistance(10% ODA)

Poverty Reduction Strategy Paper

The CAF is a tool for financing the PRSP and work toward MDGs in a Post-Conflict setting

DRC Government

BudgetHouseholds

Millennium Development Goals

Services and Reforms

Policy optionsMain option: Child-Focused (U5) Universal Cash Transfers with a health-oriented conditionality might be the best way to reduce malnutrition and U5 mortality ato meet 2 objectives:

one that offsets the income effect of the shock directly through cash transfers; and ;

one that seeks to mitigate its consequences on human development outcomes such as nutrition status of children and help to scale-up the community-based nutrition programme.

Alternative option 1: an outreach health and nutrition programme with a behavioural change communication component (therapeutic feeding centers, nutrition education for mothers, provision of vitamin A supplements and deworming: a possible reduction of administrative cost).

Alternative option 2: the abolition of basic health care user fees

Methods 1-2-3 Survey data, MTEF 2010. Costing exercise : US $ 10/child/month for the least interesting

scenario and US $ 15/child/month for the better one, the direct costs of the transfer (amount of cash to cover food and non-food needs for a child per month below the national poverty line ($ 0.72 per person per day).

12% for administrative cost to deliver the programs and 25% leakages

The costs of alternatives have been calculated as per public expenditure rather than budget allocations.

Cost-benefit analysis of CCT and determine whether it is economical and cost-effective in order to reduce poverty and accumulate human capital

Results and discussionUniversal or targeted programme? The dilemma Several vulnerable groups do exist: street children, abused

children, children separated from their parents, children in conflict with the law, exploited children, refugee children, disabled children, etc.

It is possible for a child to be both disabled and on the street or on the street and abused, etc.

It is therefore difficult to project a reduction of child poverty and vulnerability by acting exclusively on family structures as it is the case in Latin American countries (ref. PROGRESA).

This complicates any targeting as OVCs living outside a structured household will not be affected by the CCT even though they culminate worst poverty and vulnerability.

  Nb. of population

$US 10/month/chil

d

$US 15/month/chil

d

Population 63 226 000    

Estimated number of U5 12645200    

Estimated Nb of beneficiaries per households

2    

Average number of U5 (beneficiary households)

8430133.333    

Average monthly monetary benefit per household

  10 15

Average monthly transfer   84301333.33 126452000

Average Annual Transfer   1011616000 1517424000

Average transfer as a % Poverty line*   778944320 1168416480

Pre-Transfer Household Consumption   9 104 544 9 104 544

Administrative cost (12%) †   93473318.4 140209977.6

Leakages (30%) †   233683296 350524944

Extra-programme costs   327156614.4 490734921.6Total annual cost (incl. admin costs and leakages)

 1 106 100 934 1 659 151 402

Total as % to real GDP (2010)**   17.70% 25.90%

Total as % public expenditure   54.13% 64.32%* National poverty line actually rank at US$ 0.72 per person per day; ** 2010 real GDP as per national MTEF

 Policies alternativesEstimated total

cost(billion US$)

% to real GDP

Health-oriented universal cash transfer 1.6 25.90%

Outreach health and nutrition * 1.21** 20%

Abolition of basic health care user fees 0.93 15.43%

* The distribution of nutritional supplements is now integrated with Vit A and deworming ** From the Health Sector MTEF, and does not take into account leakages (normally low)

Policies alternatives and costs

The estimated annual requirements to develop and support health services as planned in the MTEF are in the range of US$ 430 million, around US$ 6.50 per capita annually, a level of public spending on health care that would be consistent with countries with an annual GDP per capita of US$ 200.

It suggests an exponential increase in resource levels and requires annual public spending of US$ 16 to US$ 22 per capita, rising to US$ 30 to US$ 40.

By this standard, current estimated total domestic and international public spending of around US$ 5 to US$ 6 in DRC implies a minimum annual gap of US$ 10 per capita, or US$ 600 million additional required resources.

The deterioration of the macroeconomic balances and the dollarization of the economy are seriously jeopardizing the ability of the government to use the traditional monetary instruments, translating any domestic borrowing immediately to inflation and exchange rate depreciation.

Potential availability of funding is therefore not enough to ensure the successful introduction of CCT as a national programme. This also requires a favourable political and social climate, with proponents who will advocate for the necessary share of the budget.

User fees and drug costs raise significant barriers to access to care for the poor, and one of the aims of domestic and international public financing is to substitute for the current level of out-of-pocket payments in order to improve access for the poor.

Given the budget execution record described previously, even this level of spending is unlikely to be achieved.

.

Concluding remarks CCT cannot operate in areas like DRC with supply-

side constraints without a comprehensive health supply strategy

In a context of generalized poverty (headcount = 77%), targeting is time consuming and is irrelevant

The programme may be administratively affordable (low administrative cost) as it is relying on an existing community-based nutrition program

The outcomes could be expected on improvement of nutritional status, but less on the rise for health demand

The option might be cost effective, but difficult to be scale-up where there is no community-based nutrition program