Do equity funds protect the poor? Case studies from north-western Madagascar

Abstract

User fees, if applied indiscriminately, have the potential to impose catastrophic costs on poor households at a time when a family member is sick and the household vulnerable. This can drive households into, or further into, poverty. In October 2003, Madagascar instituted a user fee policy that created 'equity funds' at public health centres to subsidize free medicine for the poor. This study aims to assess the outcomes of the equity funds in Madagascar from three perspectives: accuracy of targeting; improvement in health care access for the poor; and reduction in financial burden on the poor. Data collection took place in the Boeny region, Madagascar, between March and October 2006. Structured questionnaires asking about health-seeking behaviour and health expenditures were administered to all equity fund member households and two of their neighbouring, non-member households in each study site. The mean socio-economic status of equity fund members was lower than that of non-members. However, both leakage and under-coverage occurred under the equity fund scheme, the degree of which varied between sites. Equity fund members were more likely to seek care at public health centres than non-members, although variation existed among study sites, with particularly negative results at one site. Equity fund members who were aware of their member status were more likely to seek care at public health centres. Although out-of-pocket payments for outpatient consultation were significantly lower for members than for non-members, no significant difference was found for medicine payments at public health centres. The effectiveness outcomes varied across case studies and the ability of the Madagascan equity funds to protect households against financial risk was ambiguous. To some extent, contextual factors explain these outcome variations. Consequently, nationwide policy should be designed with consideration of the broader health system context and incorporate measures to manage contextual factors to achieve benefit for the entire population.