Evaluation of public health subsidy distribution in Peru shows that roughly half of the total subsidy amount goes to the non poor population. In order redistribute a larger share of the subsidy to the poor population, Project 2000 has developed a targeting strategy based on the combination of geographical targeting and individual targeting, as well as a financial strategy based on a sliding scale user fee structure.
The geographical targeting instrument is a poverty map that identifies districts in which poverty is widespread and districts in which poor households coexist with non poor households. The individual targeting instrument is an identification format that allows the classification of individual households in three groups: extremely poor, poor, and not poor. Methodologically, both instruments are based on an econometrical model that predicts household expenditure on the basis of a set of explanatory variables associated with demographic conditions, access to public services, and family owned assets.
The user fee structure establishes i) total subsidy for poor (mainly rural) districts and for the extremely poor households in urban areas, ii) partial cost recovery for households that are not extremely poor, and iii) total cost recovery for non poor households.
Two pilot experiences developed by Project 2000 demonstrate the impact of the above mentioned policy on: i) household decisions regarding health service use and selection of health providers by three population segments (extremely poor, poor, and not poor), ii) distribution of public health subsidy among these segments, and iii) administrative costs.
Learning Objectives: 1. Discuss the impact of economic barriers to health care use. 2. Explain the importance of targeting of public subsidies in health. 3. Analyze the management issues of a targeting policy
Keywords: Financing, Health Service
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: None
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.