How Conditional Cash Transfers Work for Health

By Nadin Medellín, Marco Stampini, and Pablo Ibarrarán

(Versión en español aquí)

The use of health services by disadvantaged populations in Latin America and the Caribbean has improved in recent years, as have the overall health conditions of these populations. This is due to a variety of factors, including the fact that approximately 30 million families participate in some type of conditional cash transfer program. Through these programs, families receive financial support from the government on a regular basis. The programs are often seen as handouts that do not translate into structural changes in families. However, the reality is different.

 

What Is the Aim of Conditional Cash Transfer Programs?

Conditional cash transfer programs consist of a social pact between the government and families living in poverty. For its part, the government commits to provide health and education services for the families. For their part, the families agree to a series of commitments such as ensuring that their children attend school and have medical check-ups.

The idea is that by requiring families to comply with these conditions, today’s children will become better educated and healthier adults. In addition, families that meet these commitments regularly receive financial support. Thus, the financial support that the government provides through these programs is a long-term investment that can translate into improvements in productivity in the future.  

Conditional cash transfer programs incentivize the demand for health services because they affect certain social determinants of health. We know that, for some families, it is difficult to afford the direct and indirect costs of going to a health center, even if the services are free of charge. In fact, the World Health Organization and other studies have recognized the importance of boosting demand for health services, which is precisely what conditional cash transfer programs aim to do. Through the financial support they provide, these programs look to break down economic barriers as well as provide information to families on the importance of health care methods and health promotion.

 

Do Conditional Cash Transfer Programs Work for Health?

The short-term objective of conditional cash transfer programs is to increase the use of preventive health services, principally among children and pregnant women. There is ample evidence that conditional cash transfer programs contribute to this objective. Almost all countries have reported increases in the use of health services. According to the evidence, in the case of children, the use of health services for children from 0-3 years of age went from 44 to 64 percent in Honduras. In Jamaica, the number of health center visits in the last six months doubled for children from 0-6 years of age (the impact ranges from 6.3 percentage points in Nicaragua to 33 percentage points in Colombia).  There are studies that describe the cases of Colombia and Brazil, as well as a general overview.

Another indicator of interest is the presence of skilled health care personnel at births, which increased by 11 percentage points in Mexico and 12 percentage points in El Salvador (the same study reports an increase of 36 percentage points in India). Finally, there is evidence that in Brazil health check-ups also increased for older siblings: visits by children and youths between the ages of 7 and 17 increased even though they were not required to go to the doctor as a condition under the program. This shows that the programs succeeded in changing behaviors beyond the actions specified as conditionalities.

Although the immediate objective of conditional cash transfer programs is to draw people to health services, what is important is to improve the health of the population. It is important to clarify that even though this depends not on the programs, but rather on the quality of the health services, conditional cash transfer programs should be analyzed to determine if they have had an impact on the health conditions of the beneficiary population.

Here there is also good news. In Mexico, a decline of 4.6 percentage points in the percentage of children with low birth weight has been documented along with a 56 percent decline in hospitalizations of children up to 2 years of age, which shows the effectiveness of preventive health programs. In Brazil, the probability of mortality among children under 5 years of age declined by between 6 and 17 percent among beneficiaries of the Bolsa Familia Program compared to similar groups that did not participate in the program. The decline was particularly pronounced for causes of death associated with poverty, such as malnutrition and diarrhea. In addition, in Mexico, where the program encourages all members of households to use health services, a study of rural areas in 2007 showed that vaccination rates among adults for influenza, pneumococcal diseases, and tetanus increased by between 5 and 8 percentage points.

 

How Do Conditional Cash Transfer Programs Work?

Although it may sound simple, operating transfer programs on a large scale is very complicated. It is necessary to define and, in some way, identify the target population, program conditionalities and mechanisms to verify them, and the structure of the transfers and the scheme to make the payments in an efficient manner. Several Latin American and Caribbean countries have been working in this area for 20 years, with encouraging results. A new publication from the Inter-American Development Bank explains how these programs work, identifies best practices, and discusses the challenges involved in operating them and how they can be improved to achieve a greater impact, both in terms of health and other dimensions.  
 

What other experiences do you know of that impact the social determinants of health? How do you think the effectiveness of cash transfers could be improved to promote healthier lifestyles?

Share your ideas mentioning @BIDgente en Twitter.

To learn more about how conditional cash transfer programs are improving lives, you can download the publication “How Conditional Transfers Work” free of charge.

 

Nadin Medellín is a consultant in the area of social protection in the Division of Social Protection and Health of the Inter-American Development Bank.

Marco Stampini is a leading specialist on social protection in the Division of Social Protection and Health of the Inter-American Development Bank.

Pablo Ibarrarán is a leading specialist on social protection in the Division of Social Protection and Health of the Inter-American Development Bank. 

Social Protection Programmes: 
  • Social assistance
    • Social transfers
      • Cash transfers
        • Conditional cash transfers
Social Protection Topics: 
  • Benefits level
  • Benefits payment/delivery
  • Conditionalities
  • Coverage
  • Feedback and complaints mechanisms
  • Governance
  • Targeting
Cross-Cutting Areas: 
  • Health
Countries: 
  • America
Regions: 
  • Latin America & Caribbean
The views presented here are the author's and not socialprotection.org's

Comments

Conditional cash transfers proved to be one of the most prevalent social assistance programs in low and middle-income countries. In Latin America and the Caribbean conditional cash transfer programs are affecting over 135 million people. These programs are expanding at a fast pace. Over fifty countries worldwide operate CCTs, more than twice the number in 2008.
The first generation of CCT programs and associated impact evaluation studies produced considerable evidence suggesting that these programs demonstrably helped lift many families out of poverty and have improved short-term educational, nutritional and health outcomes of millions of children worldwide.
Ephraim Zagelbaum

As you discussed, the use of conditional cash transfers (CCTs) to improve population health has become increasingly common, with the scope and spread of CCTs growing significantly in the past 10 years. In addition to the programs implemented in Latin America discussed above to incentivize use of preventative health services through conditional payments from the government, CCTs and other forms of incentivizing changes in behaviors, including health behaviors such as utilization of health services, and improved health outcomes have been explored in a variety of contexts. Generally, CCTs are understood to buffer the poor from sudden income shocks and encourage behavior change at an individual level by redistributing wealth and eliminating challenges in access and/or utilization, and by essentially paying people to enact beneficial behaviors. Overall, these programs have had strong impacts on proximal outcomes, such as school enrollment, vaccination, and use of other preventative health care (as discussed above), but the impacts on final outcomes such as the achievement levels of children and changes in health at the population level are less clear. And while they can reduce poverty and increase agency for beneficiaries (including empowering women), there have been instances where CCTs have unexpected and undesirable outcomes. Despite this, the array of evidence showing the impacts of CCTs on proximal factors and their potential to positively affect population health means that they will only become more widespread as the focus of health intervention increasingly shifts from the individual to the system and social determinants of health.1,2 But in the design and implementation of CCTs programs the intent of such programs must not be forgotten—CCTs programs are meant to break the links between poverty and poor health across generations. To realize this goal, programs must be conceived and implemented in local collaboration, strategic and aware of the potential synergies and antagonisms always present in addressing social determinants of health, and focused not just on reducing poverty and improving health but on increasing equity and removing barriers.

Key to this conversation is the need to focus CCT programs on reaching those most in need with targeted approaches. The poorest households are those most in need of the benefits of CCTs, and while there are many challenges in ensuring they are beneficiaries this is key if programs are really intended to increase equity and break intergeneration cycles. Yes, targeting households and individuals means more time and expense in design and rollout, and sometimes those most in need are the hardest to reach. But rolling out programs that simply give CCTs to random household without consideration of need, particularly when available resources limit the provisional scale, does not seem like an effective approach as it does little to account for the issue it is working to impact. Without understanding who is most impacted by poverty and seeking to assist them, equity is not possible.

Additionally, we must ask questions about how CCTs impact the power structures of the communities and populations they are being implemented in. Particularly when CCTs are intended to impact sexual and reproductive health for women and girls—as seen with programs for HIV and other STI prevention and behavior change around sexual risk, contraceptive use and reducing family size, and improving birth outcomes by reducing risk during birth through birth with an attendant or in a hospital—these programs have real potential to shift power in addition to impacting poverty and health. The potential for female empowerment through CCTs has been discussed, and even touted as a positive result of CCTs and a reason for implementing them. But we have to be careful in how we think about ‘empowerment’ and cautious of the impacts of encouraging power shifts within different contexts, particularly if the potential repercussions for those being ‘empowered’ are not considered. While CCTs have the potential to benefit girls and women through a variety of avenues, including shifting gender power distributions, they also have the potential to add to the pressures and burdens of women. This has been seen with instances of violence enacted against women who received significant CCTs in contexts of gender imbalance, and with mothers taking on additional household work when daughters and spending longer enrolled in school (see discussion in Hagen-Zanker et al).3 Contextually specific gender dynamics and the potential impacts of CCTs, both desired and not, must be considered when designing and implementing these programs.

For that reason and others, developing CCT programs based on local priorities and in collaboration with local stakeholders is incredibly important. As the fields of health intervention and research continue to develop, focus is increasingly relocating the power and impetus of intervention within the affected population. This is seen with empowerment theory approaches to research, CPAR, and YPAR, all approaches that shift priority setting, decision making, and benefits to the community or population in need, changing the dynamic of program implementation and research from one of paternalism to one of collaboration. For CCTs to be effective, a similar approach must be taken. Oportunidades in Mexico as well as other CCT programs have been locally-driven, designed, and implemented, valuing the priorities of the location the program was being implemented and more able to account for context-specific needs, challenges, and opportunities.

It has been found that when CCT programs are well targeted and structured, they have real potential to improve the lives of beneficiaries. As you mentioned, the design and implementation of CCT programs is incredibly complicated when done well. If we mean to do this well, issues of design and implementation must be considered and we must collaborate to ensure that the CCT programs that will inevitably be developed in the coming years take these issues into account. We must keep the intention of CCTs in mind and work to remove barriers and improve equity if we really intend to improve population health.  

 

1. Fiszbein, Ariel, and Norbert R. Schady. Conditional cash transfers: reducing present and future poverty. World Bank Publications, 2009.
2. Dow, William H., Justin S. White, and Stefano Bertozzi. "Incentivizing Health Care Utilization and Health Outcomes." World Scientific Handbook of Global Health Economics and Public Policy:(A 3-Volume Set) 3 (2016).
3. Hagen-Zanker, Jessica, Luca Pellerano, Francesca Bastagli, Luke Harman, Valentina Barca, Georgina Sturge, Tanja Schmidt, and Calvin Laing. "The impact of cash transfers on women and girls." Education 42, no. 15 (2017): 2.