Financial incentives for maternal health: Impact of a national programme in Nepal
Timothy Powell-Jackson, Kara Hanson
Journal of Health Economics · 2012 · DOI: 10.1016/j.jhealeco.2011.10.010
Countries: Nepal
What Was Studied
The authors evaluate the impact of Nepal's Safe Delivery Incentive Programme (SDIP), introduced nationwide in July 2005, on the use of institutional delivery care. SDIP offered women a cash payment for delivering in a public health facility (500/1,000/1,500 Nepalese rupees in plains, hill and mountain districts respectively), fee exemptions in the poorest third of districts, and a small incentive to attending health workers. Using survey data on 5,903 deliveries collected two and a half years after the programme began, across six districts spanning Nepal's three ecological zones (Sankhuwasabha, Myagdi, Rupandehi, Jumla, Achham and Morang), the study defines a woman as 'treated' if she had heard of SDIP before childbirth, and estimates the average treatment effect on the treated using propensity score matching (kernel, Mahalanobis and nearest-neighbour estimators), cross-checked against an instrumental-variable approach using radio-listening frequency as the instrument. The six districts were purposively chosen to capture variation in the size of the incentive package across ecological zones, not to be nationally representative, so the estimates describe programme mechanisms rather than a population-representative national impact.
What They Found
The programme had a statistically significant but modest effect: women who knew about the SDIP before childbirth were 4.0 percentage points (18% relative increase; 95% CI 5-31%) more likely to deliver in a health facility, 4.2 percentage points (17%; CI 4-29%) more likely to have a skilled attendant (doctor, nurse or midwife), and 5.2 percentage points (17%; CI 6-28%) more likely to have any professional health worker present. There was a positive but weaker effect on caesarean sections (1.2 percentage points, 36% relative increase, significant only at 10%). The gain in government facility deliveries (4.3 percentage points, 26%; CI 10-42%) was partly offset by a fall in NGO hospital deliveries (-1.1 percentage points, -31%; CI -65 to 2%), suggesting some substitution between providers rather than pure new demand. Programme implementation itself was weak: only 24.3% of women had heard of the SDIP before giving birth, and only 26.5% of women who delivered in a government facility actually received the promised cash, with districts receiving SDIP funds from central government 283 days late on average in the first fiscal year. The authors estimate the cost per additional facility birth at roughly US$115-210.
What This Means for Nepal
This paper's core lesson — that a demand-side cash incentive underperforms when awareness is low (only 24% of women knew about SDIP) and payment systems fail (barely a quarter of eligible women were ever paid) — is a direct warning for Nepal's current demand-side financing instruments. The National Health Insurance Programme (NHIP) faces an analogous administrative bottleneck today: its roughly 20-person claims-review team must process 25,000-30,000 claims per day against a manual capacity of about 6,000, producing arrears of over Rs 16 billion by 2026. MoHP and the Health Insurance Board (HIB) should treat benefit design and payment/claims infrastructure as inseparable — any expansion of Aama (SDIP's successor) or NHIP subsidies should pair (i) systematic community-level promotion through the country's roughly 50,400 FCHVs, who are already the main channel for disseminating information on maternal-health entitlements, with (ii) a hard service-standard for disbursing funds to facilities and beneficiaries within a fixed number of days, since this paper's own finding is that impact was driven largely by whether women actually expected and received payment, not simply by the incentive existing on paper.
Contextualisation
Nepal's Safe Delivery Incentive Programme (SDIP) — launched nationwide in July 2005 and rebranded 'Aama' in January 2009, when institutional delivery became fully free — is the direct policy ancestor of Nepal's current safe-motherhood financing model, and this paper is the first rigorous impact evaluation of its early (2005-2008) rollout. Its central finding, that the cash incentive alone raised institutional delivery by a modest 4 percentage points because barely a quarter of women knew about the programme and only 26.5% of those eligible were ever actually paid, is a direct cautionary lesson for any Nepali demand-side financing reform — including the currently strained National Health Insurance Programme (NHIP), where administrative bottlenecks (e.g. HIB's claims-review backlog) similarly threaten to blunt benefit design on paper.