Program Objectives and Design

The objectives of the OBA program are to offer quality reproductive health care services in five pilot sites for economically disadvantaged populations by means of a voucher system. The program aims to contribute to a reduction of both maternal and infant mortality rates.

In 2005 the Government of Kenya and the Federal Republic of Germany (through KfW Banking Group) entered into an agreement to fund delivery of safe motherhood, family planning, and gender violence recovery services by an overall budget of almost 6,6 million euros. The project is implemented on a pilot basis for three years and targets economically disadvantaged people in three rural districts (Kisumu, Kiambu, and Kitui) as well as two urban slums in Nairobi (Korogocho and Viwandani). The program is planned to cover an estimated population of three million people.

Overall project design is the Output Based Aid (OBA) approach, i.e. financing agreed outputs and linking payments to volume of services through a voucher system. The vouchers are sold at highly subsidized prices, providing a direct subsidy to the poorest people allowing them to access safe motherhood and family planning services ultimately increasing uptake of these services. These services are delivered by qualified and certified service providers.

The lessons learnt from the voucher program are expected to contribute in developing a National Social Health Insurance Scheme. The OBA project will be an integral part of the Sector Wide Approach (SWAP) in the Ke-nyan health sector.

New approach in healthcare system development

The voucher concept represents a demand-side approach to financing health care by subsidizing health care clients directly. Opposed to that, public sector health care provisions are largely financed through supply-side subsidies which usually come along with low-priced or officially free health care services.

Experience has shown that goals of ensuring broad access to health care for entire populations have hardly been met by implementing supply-side subsidies. The flow of funds is often not suitable for health care systems largely based on supply-side subsidies. Such systems grossly lack efficiency since service provision cannot sufficiently be aligned with consumers’ needs and preferences, and they are characterized by quality problems, low motivation of staff and inadequate supply of drugs and consumables. Evidence indicates that people are seeking better-quality health care in the private sector and pay out of pocket for this. For the poor that means an extra financial burden resulting in unequal access to care and low utilization of needed services.

The subsidized vouchers broaden accessibility to healthcare services: it is no longer only public or district hospitals where women can afford to go to, where utilization is otherwise often restricted by transportation costs, or other obstacles such as ‘under the table payments’ so that most of them have to deliver at home, but clients in this scheme can access the full range of public and private facilities which have qualified for the voucher program.