Vouching for health vouchers

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targeted beneficiaries, the poor.

Provision of healthcare vouchers to the targeted beneficiaries can be an efficient channel, as it provides universal coverage, efficiency and free choice to the consumer. The basic idea behind healthcare vouchers is of subsidising demand among the targeted beneficiaries for cost effective health services and allowing a competitive market for its provision.

This will be more beneficial than using those same resources to subsidise supply as vouchers provide a direct link between the intended beneficiaries, subsidy, and the desired output, such as access or utilisation.  The aim is to empower the poor to choose the health service provider of their choice and allow them access to private health services.

One of the potential advantages of vouchers will be that they would facilitate reforms in pursuing the health problem or investment that would be otherwise difficult to achieve. In a country like ours, where awareness of health services is poorly disseminated, vouchers can also encourage people to visit service providers they might not otherwise have visited. They can prove very useful for subsidising services which are under consumed from the social welfare point of view, such as family planning, immunisation, mother and child healthcare, and treatment of infectious diseases.

Moreover, the use of vouchers will enhance competition between the service providers, as the bearer of the voucher will choose the service provider. The freedom of consumer choice will also force the service providers to improve the quality as even if all the providers charge the same price the bearer will choose the provider who offers most convenient and highest quality service. The providers will be bound to improve their quality in order to attract voucher-bearing users. Thus the voucher scheme can facilitate quality services for the poor and underprivileged sections.

Voucher schemes have been used all over the world to distribute public resources in different sectors but experience in the health sector is very limited. Some examples of healthcare voucher schemes can be found in low-income countries such as Indonesia, Zambia, Kenya and Nicaragua, where they were used in various forms for diverse objectives. Experience from various countries shows that setting up of the scheme might have some complexities, but once the schemes function, they are easier to run.