Transcript The difference between supply and demand side instruments

Building Public/Private Partnership
for Health System Strengthening
Vouchers: An Overview
Peter Berman
The World Bank
Bali Hyatt Hotel, Sanur, Bali
21-25 June 2010
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The key differences between “supply side”
and “demand side” approaches
What are vouchers? How do they differ from
other “demand side” instruments?
Advantages and disadvantages of vouchers
Examples
Concluding Thoughts
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ADVANTAGES
Simple to introduce
Cheap to administer
Best when the
supplies subsidized
can be, or are only
used by target
groups
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DISADVANTAGES
Difficult to target
Reduce incentive to
provide services of
high perceived
quality
Reduce incentive to
maximize efficiency
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ADVANTAGES
Productivity-based
remuneration
Evidence-based
practice
Targeting
Output-based
monitoring and
evaluation
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DISADVANTAGES
Higher transaction
and administrative
costs
Over-servicing
Cream-skimming
Sometimes lower
patient satisfaction
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CONSUMER-LED
The subsidy is
transferred to the
consumer, either as
cash or as some
token of exchange
(such as a voucher),
either in advance of
service provision, or
post-hoc as a refund
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PROVIDER-LED
The subsidy is given
to the provider based
on a contractual
arrangement with the
funding agent in
which there is a direct
link between output
and the quantity of
subsidy received.
SUBSIDIES TRANSFERED
BEFORE SERVICE
PROVISION
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Cash transfer payments
Contributions to, or
tax-rebates on, family
medical savings
schemes
Vouchers
SUBSIDIES TRANSFERED
AFTER SERVICE
PROVISION
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Cash refunds
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A demand-side consumer-led subsidy
instrument
A token that can be used in exchange for a
restricted range of goods or services, either
partially (e.g. as a discount) or in total.
OR PUT MORE SIMPLY
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‘Tied cash’
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For targeting subsidies more accurately
For stimulating demand for underconsumed services
For simplifying the administration of
demand side subsidies
For reducing provider-induced demand
For providing service packages of fixed or
predictable cost
For increasing client satisfaction
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Groups who operate outside the law
(drug addicts; often commercial sexworkers)
Groups that fear stigmatization (e.g. TB
patients; leprosy patients; HIV/AIDS
patients; men who have sex with men)
The poor, if these can be more accurately
identified in the community than at the
point of service delivery
Dr Peter Sandiford
Dr Anna Gorter
Dr Zil Rojas
MSc Micol Salvetto
“Pre-feasibilty Work and Feasibility
Assessment”
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Supply and Demand Side Subsidies
What is a Competitive Voucher Scheme
When to Consider a Voucher Scheme
HOW TO INTRODUCE
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Pre-Feasibility then Feasibility Work
Design (Key Process and Structures issues)
Implementation (Key steps_
Monitoring and Evaluation