Cost Recovery and the True Cost-Effectiveness of Contraceptive Provision

Abstract

The decline in financial support for family planning programs in recent years has prompted donors and program managers to become more attentive to issues of program cost recovery and cost-effectiveness. Couple-years of protection (CYP) per dollar spent are typically used to determine the protective impact and cost-effectiveness of individual contraceptive methods. This measure however inadequately assesses the level of protection offered by each method. The authors therefore propose adjusted CYPs which take into account the relative risk of pregnancy among users of each method. The general methodology for establishing true cost-effectiveness ratios for family planning methods and operations is outlined with the methodology presented for computing the adjusted total CYP taking into account subsidies and the varying risks of pregnancy for users of different ages. The approach is then applied to Profamilia data from Colombia. Calculations demonstrate how recovering costs and investing the proceeds from family planning programs lead to the cross-subsidization of methods. Of particular interest it is found that more subsidized contraceptive methods tend to be supported by less subsidized methods. The data further indicate that because of the differences in the relative risk of pregnancy of women of different ages sterilization the most effective contraceptive methods is not necessarily the most cost-effective method in terms of the number of CYPs it offers per unit cost.