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Financial incentives found to have no effect on newborns’ health in India - 3ie-LIDC seminar

Timothy Powell-Jackson from the London School of Hygiene & Tropical Medicine (LSHTM) talked about the impact of a financial incentive programme on increasing births in medical facilities in India at the latest 3ie-LIDC Seminar Series ‘What works in international development’ on 23 May. Financial incentives to encourage health-improving behaviour have become a popular practice in recent years, with a strong body evidence suggesting they do indeed increase uptake of health services. However, they remain controversial. The programme covered in the present study, called Janani Suraksha Yojana (JSY), is one of the largest of its kind. It was officially launched across India in 2005, and provides up to $30 dollars in cash for mothers who come to give birth in public medical facilities and accredited private facilities.

The study, conducted by Dr Powell-Jackson and his co-authors Sumit Mazumdar and Anne Mills, used data from two rounds of a national survey collected in 2002-2004 and 2008. In contrast with earlier studies of the JSY, this paper explores unintended consequences. For instance, the scheme may inadvertently increase fertility because it provides incentives for delivery care. Although policymakers sought to guard against this by excluding women with more than two children from receiving benefits in some states, it this was difficult to enforce practically. The study did find some evidence for increasing fertility.

More importantly, the study found that the programme had led to a modest increase in facility births (from 40% to 44%). This came at a high cost per each extra birth, as mothers who would have come to the facility anyway also received payments. That the increase in facility births did not translate into better health – neonatal and one-day mortality remained unaffected by the JSY – may suggest that investments in improving the referral system and quality of care should happen in tandem with demand-side intervention.  

The discussant, Marcos Vera-Hernández from University College London (UCL), had mostly praise for the study, mentioning among other things its thoroughness, with many rigorous robustness tests conducted to ensure the validity of its findings. Vera-Hernández had a few suggestions for improvements, particularly regarding seeing mothers as parts of large families, rather than isolated individual agents. For instance, does having a mother-in-law in close vicinity correlate with decreased tendencies for mothers to go to a medical facility to give birth?

Attendees from civil society organisations were intrigued by the findings, although more local evaluations would be necessary for them to consider the study in relation to their own programmes. The present study did indeed find great variations, both in time and location. There were also general concerns that a focus on the demand side of health may have the effect of discouraging patients to demand better quality care, and that improving the quality of medical services and lowering in-facility neonatal mortality first may inspire public confidence and trust in using hospitals and local health facilities.

The seminar was part of the 3ie-LIDC series “What Works in Development”.

Download the full paper.