Cost and Efficiency of Reproductive Health Service Provision at the Facility Level in Paraguay

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Author(s): Angeles G, Gaete R, Stewart J F

Year: 2002

The cost and efficiency at which maternal, child, and reproductive health care services are provided in developing countries have become increasingly pressing issues over the last decade. A number of factors are driving the concern over cost and efficiency. These include the staggering estimated total cost of providing these services, (1) the scarcity of funds to meet policy objectives, and the resultant pressure from donor countries and agencies for programs to be more accountable for results and cost effectiveness, and for programs to demonstrate the potential for long run sustainability. Furthermore, the analysis of many policy issues of current interest can be informed by detailed information on cost of service. It has long been hypothesized that organizational structure of the health care service provision system may have a substantial impact on the cost of service provision. Analysis of issues such as the effect of decentralizing the health care system or converting from vertical to integrated systems requires large cross sectional data bases of cost information. Existing data obtained at the facility level such as the DHS Service Availability Module and Situation Analysis, while providing much information about the facility's operation, provide essentially none of the information required to make estimates of service provision costs. Any examination of cost and efficiency of the provision of health care services is complicated significantly by the fact that reproductive health involves a large number of different services each with different cost implications. In this paper we develop a methodology for estimating facility level service provision cost disaggregated to the service level that makes use of survey data collected from 52 public health facilities in Paraguay. In addition, a method is developed to calculate facility level measures of staff use utilization rates to provide information on the efficiency of input use in the Paraguayan health care system. The current paper is part of a larger study of health care decentralization in Paraguay. (2) The broader study was designed to measure changes in cost, efficiency, and other attributes of the public heath care system that might be attributed to the change from a centralized system to one where the responsibility for managing basic health care services provided through public facilities is devolved to the municipal governments. The sample was selected to include a census of public health facilities from 20 municipalities in Paraguay, 11 of which were to be subject to decentralization and 9 were to remain under centralized control. The current paper reports the baseline cost and efficiency results. 1. The United Nations Fund for Population Activities (UNFPA) has estimated that worldwide spending on family planning (FP) and reproductive health (RH) will reach 17 billion dollars annually by the year 2000 (UNFPA, 1996). 2. See Angeles, et al., 1999.

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