Demand side financing in healthcare in Bangladesh

Munzur-E-Murshid | Published: October 17, 2018 21:30:42 | Updated: October 24, 2018 21:51:24

Currently, many low-and middle-income countries provide demand-side financial incentives (DSF) to improve healthcare services and health-related behaviour. Demand side financing is a tool to improve utilisation of underutilised services. By improving purchasing power, demand side financing improves service utilisation among the needy and the under-served population.

CORE FEATURES OF DEMAND SIDE FINANCING: Demand side financing have three core features:

a) Pre-specified target groups (ex- pregnant women of families below poverty line),

b) financial transfers to the beneficiaries from the authority,

C) merit goods with large positive externalities.

In addition, it has other features such as involvement of private providers along with government providers, incentives for service delivery.

This financing mechanism may run on its own or it may be a part of a bigger scheme under community health insurance or other health schemes. Demand side financing differs from other financing mechanism, because it particularly focuses on underutilised services in order to empower target population to use it efficiently.

DSF programmes can be consumer-led or provider-led. Consumer led DSF can be voucher programmes, cash transfer, tax rebates etc. Provider-led DSF can be cash payment, referral vouchers etc. Most commonly used DSF mechanism is voucher programme. Here a token is used for a restricted goods or services. Voucher mechanism is used in healthcare in exchange of healthcare services. Vouchers are being distributed among pregnant women to improve access and utilisation of ante-natal care, to promote safe delivery, emergency referral and postpartum care services. Pregnant women get cash for transportation.

Maternal Healthcare Voucher Programme (DSF) is being implemented by Ministry of Health and Family Welfare in Bangladesh. The ministry is getting help from the World Health Organisation, World Bank, Department for International Development and United Nations Population Fund. The aim of the mechanism is to improve utilisation of maternal care services by the poor pregnant mother and at the same time to reduce maternal mortality ratio.

Maternal voucher programme was launched in Bangladesh in 2004. But it became functional in 2007. Initially, maternal voucher scheme (DSF) was implemented in 37 upazilas. Gradually, its operation got expanded to 53 upazilas till July 2011.  A total of five hundred thousand mothers were benefited from this scheme. According to a household survey in 2016, DSF upazilas and 16 matched control upazilas covering 2208 women who delivered between February 2009 and July 2009, key demand side impacts of DSF programme are:

1) The rate of deliveries attended by qualified providers is now more than twice as high in

DSF programme upazilas (64 per ent) compared to control upazilas (27 per cent), national figure being 29 per cent.

2) The rate of institutional deliveries is now twice as high in DSF programme upazilas (38 per cent) compared to control upazilas (19 per cent).

3) Women in DSF upazilas are significantly more likely to seek PNC services (36 per cent) than

women in control upazilas (21 per cent). Total out-of-pocket expenditures for ANC, PNC, and delivery care are significantly lower in DSF programme upazilas (Tk. 1,441) than in control upazilas (Tk. 2,191).

KEY SUPPLYSIDE IMPACTS:  According to the aforementioned survey, the incidence of still births is significantly lower under DSF programme. In general, Upazila Health Complexes (UHCs) in DSF areas possess a greater proportion of recommended supplies for normal and complicated labour and delivery; these facilities also have slightly more equipment and medications than control facilities to manage hemorrhage, eclampsia and obstructed labour.

About three-quarters of providers indicated that they enjoy working with the DSF programme; their main complaints relate to inadequate compensation, given the increased workload. In spite of positive impact, human resource shortages present a serious challenge to implementing the DSF programmes.


1) Shortage of supplies and medicines

2) Delay in disbursement of funds [central level to upazila level and from upazila level to beneficiaries]

3) Poverty related targeting is difficult and costly, and prone to leakage

4) Current DSF programmes provide support up to second pregnancy

In spite of some drawbacks and challenges demand side financing is one of the best options to improve maternal health status by improving utilisation of under-used services in low and middle income countries.  

Munzur-E-Murshid  is a physician and public health enthusiast.

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