Worldwide, there are 500 million cases of malaria each year, and as many as 1.5 million people die annually from the disease. The majority of these deaths are in sub-Saharan Africa, which is home to an estimated 91 percent of the world’s malaria deaths.1 Public health experts and officials have long agreed that prevention through widespread use of insecticide-treated nets (ITNs or bednets) is the most viable way to prevent and control malaria. Yet ITN coverage is woefully low among the most vulnerable groups such as pregnant women and children.
There is a general consensus among academics and policymakers that the provision of public health goods with positive externalities should be publicly financed. But there is also a long-running debate on what proportion of the cost the beneficiaries of these public health programs should bear. Standard economic analysis implies that goods (such as ITNs) that have a positive benefit (such as reduced malaria transmission) to the whole community when they are used by individuals should be highly subsidized or even free, depending on the level of individual benefit.
Some argue that charging non-zero prices for health tools may increase usage intensity by screening out those who do not value the good, and inducing people to justify their purchase by using the good. Furthermore, charging fees may help raise revenues to make programs more sustainable. However, cost-sharing may reduce program coverage by dampening demand. And if people who cannot afford the price are more likely to be vulnerable to malaria, then, by selecting these people out, charging a positive price could significantly reduce the health benefits of the partial subsidy.
Together Against Malaria (TAMTAM) delivers free ITNs through prenatal clinics in Kenya to increase coverage among pregnant women and children.2 Other groups, such as Population Services International (PSI), provide ITNs at subsidized prices in the same areas. To test whether it is preferable to freely distribute bednets or require a co-payment by recipients, in 2006 J-PAL affiliate Pascaline Dupas along with Jessica Cohen evaluated the TAMTAM approach. In 16 randomly selected health clinics, ITNs were distributed at a subsidized rate, with the discount varying between 90-100 percent of market price. Researchers found that charging even small positive prices considerably decreased demand: ITN uptake dropped by 60 percentage points when the price increased from zero to $0.60 (i.e. from 100 to 90 percent subsidy). Furthermore, women who paid positive prices were no more likely to use the ITNs than those who received ITNs for free. The combination of lower uptake at positive prices and no change in the usage rate translates into lower absolute number of ITNs in use. For more about this project, see the related evaluation page and the cost-effectiveness page.
Informing the Debate
In the past few years, many organizations have reconsidered their policies to charge for health services, opting instead to distribute ITNs and other health products free of charge. The elimination of user fees is now strongly supported by a number of influential organizations including the U.K.’s Department for International Development (DFID), Save the Children UK, the United Nations Millennium Project and the Commission for Africa.3 In 2009, the British government cited the study by Cohen and Dupas in calling for the abolition of user fees for health products and services in poor countries.4 Many countries including Burundi, Nepal, Malawi, Zambia, Sierra Leone, Ghana and Liberia are responding to this call, taking major steps towards the provision of free services.
Population Services International (PSI) is a leader in malaria prevention, providing malaria control support to national Ministries of Health in over 30 countries worldwide. Traditionally PSI has supported the practice of cost-sharing for ITNs as they believed that positive prices increase usage and promote sustainability.5 PSI has increasingly moved to free distribution of ITNs for pregnant women in Kenya. Today, PSI’s bednet delivery strategies include routine facility-based delivery, mass free distribution for rapid scale-up and continued engagement of the private sector in some locations. For example, in Kenya PSI delivers free ITNs to pregnant women through 3,000 public antenatal clinics, while at the same time subsidizing ITNs sold commercially.6 The World Bank has also started shifting away from this position, and the WHO recently endorsed free distribution of bednets.7