The challenge – family planning programs – includes related articles on family planning financing and contributions to family planning

Family planning programs serve millions of clients in developing countries, and the number of clients is growing fast. The very success of family planning programs poses a challenge: how to pay for family planning services for all who need and want them.

Paying for family planning is part of the larger problem of paying for health care in developing countries. For years many developing-country governments have tried to provide free health services to all, considering it a basic human right. Financial, logistical, and political constraints have prevented them from serving everyone, however. Furthermore, like the demand for family planning, the demand for all health care is increasing, and governments have not kept pace. Thus governments, along with donor agencies and private voluntary organizations, are searching for new ways to pay for health services, including family planning.

Current and Projected Costs

of Family Planning

How much is being spent now on family planning in the developing world? Estimates of current expenditures range from US$2.2 to $4.5 billion ($22 to $45 hundred million) [84, 109, 179, 215]. The low end of the range excludes China and most costs indirectly related to service delivery–for example, the cost of research, surveys, training, communication, and technical assistance. The high end includes China and many of these indirect costs. (Expenditures in China have been estimated at about US$1 per capita, or about US$1 billion [37].)

According to the United Nations Populations Fund (UNFPA), developing-country governments contribute 75% of the current total expenditure. Donor agencies and the World Bank contribute 15%. Users pay for about 10% [213, 215]. The Population Crisis Committee (PCC) estimates that governments pay 63%; donors, 20%; and users, 17% [179].

How far do these expenditures go? Currently, an estimated 315 million married couples of reproductive age in developing countries, including China, use a modern method of family planning [211]. These couples account for 44% of all married women of reproductive age. This expenditure falls short of meeting the need.

How much more money is needed now? By rough estimate, an additional US$1.0 to $1.4 billion per year would meet the family planning needs of married women who want to limit or space births but are not now using modern contraception. This estimate is based on findings from 25 Demographic and Health Surveys (DHS). In those surveys the percentage of married women who said that they did not want more children at the time but were not using family planning ranged from 11% in Thailand to 40% in Togo [220]. An approximate regionally weighted median for the developing world including China is 15%, which amounts to about 100 million couples who need family planning now but are not using it. Currently, US$3.2 to $4.5 billion serves 315 million modern-method users in all developing countries. Dividing the total expenditure by the number of users yields a crude estimate of the average annual cost per user–$10 to $14. If this cost per user also applies to serving new users, meeting all unmet need for family planning now would cost an additional $1.0 to $1.4 billion. This estimate does not include additional costs for condoms used to protect against AIDS and other sexual transmitted diseases.

How much money will be needed in the future? By the year 2000 the numbers of family planning users will have grown dramatically, and so will the cost. Projections of the cost of family planning in the year 2000 range from less than $4 billion to more than $11 billion in 1988 US dollars (see Table 1). Most of these estimates assume that population growth will proceed according to a standard projection–usually the United Nations medium variant projection. They then estimate the cost of providing services for the number of contraceptive users needed to hold population growth to the projection. The estimates vary widely because some include many indirect costs while others do not. The estimates also depend on researchers’ assumptions about the number of users, the methods that they will use, and the cost of each method or the program cost per user, as well as whether or not they include China.


For example, Duff Gillespie and colleagues at the United States Agency for International Development assume that, to reach the UN medium population projection in the year 2000, 349 million couples in developing countries excluding China will use family planning in 2000. This would amount to 52% of married women of reproductive age. They assume the current method mix and add two scenarios in which the percentages using injectables and implants increase and the percentages using oral contraceptives, voluntary sterilization, and intrauterine devices (IUDs) decline. They assign commodity costs for each method and add an average service delivery cost of $18 per couple-year of contraceptive protection for all methods. Thus they estimate that meeting the UN medium projection in the year 2000 will cost $5.2 to $5.4 billion in the developing world [84].

By comparison, PCC has estimated that contraceptive prevalence in the developing world including China will have to increase more rapidly–to 75%, or 720 million users, by the year 2000–to stabilize world population at 9.3 billion by 2095. Using a cost of $16 per user, PCC estimates that the total cost of services for these 720 million users in the year 2000 will be $11.5 billion, more than three times the PCC estimate of current expenditure [179, 239].

What Can Be Done?

Despite differences, all projections indicate large growth in the number of family planning users by the turn of the century and thus a higher cost of serving them. While the growth in family planning use is crucial, the increasing cost raises the issue of who will pay for the services, and how.

Donor agencies in developed countries have been challenged to increase funding for family planning dramatically. They currently allocate only a tiny proportion of total aid for developing countries to family planning (see box, this page).

Developing-country governments also could pay more. They currently spend about $3.4 billion on family planning. This amounts to only 0.4% of total government expenditures. By comparison, they allocate about $167 billion to military expenditures, accounting for 19% of total government expenditures [243]. UNFPA and PCC suggest only moderate increases in developing-country government expenditures by the year 2000–to $3.5 to $4 billion per year [179, 215]. To reach these levels, developing-country governments would need to shift only one-tenth of 1% of their total expenditures to family planning.

Several projections anticipate that family planning users will contribute $1 billion in the year 2000, about double what they currently pay. Many users can and will pay at least nominal charges for family planning supplies and services. Others who benefit from family planning, such as employers, also can contribute. A number of approaches are being used to tap this potential:

* Increasing the role of the commercial sector–that is, pharmacies and other retail outlets–and of fee-for-service providers, mainly doctors, nurses, and midwives in private practice. More promotion of private-sector family planning services is needed. So is an end to regulations that hobble these providers. With more users paying for family planning from these sources, public programs will be able to serve more of those who cannot pay.

* Expanding health care coverage by third parties–social security systems, health insurance companies, and health maintenance organizations (HMOs)–to include family planning services.

* Expanding cooperation between the public and private sectors–for example, in social marketing programs and employment-based family planning programs.

* Recovering costs. Public and private nonprofit programs can introduce or increase user fees. They also can cross-subsidize family planning services from other health care services. For public programs community financing is a third option–for example, paying the salary of a village health worker from fees levied on villagers.

* Increasing efficiency. For example, using lower-level health care personnel in place of doctors often can safely reduce unit cost, thus allowing expanded services.

These approaches are not likely to change who pays for most family planning in the developing world. They will not relieve governments and donors of the responsibility for providing family planning to most users. They may, however, make some contributions to paying for family planning.

The importance of this contribution will differ in different regions. Increasing the role of the private sector is important in Latin America and the Near East, where many users already buy contraceptives, and in countries where contraceptive prevalence is high, such as Indonesia. Social marketing programs have the most potential in areas of moderate economic development and moderate contraceptive use, where both expendable income and the desire for family planning are growing. Increasing health care coverage, especially in social security systems, has great potential in Latin America. In sub-Saharan Africa and South Asia, heavy subsidies will continue to be necessary, but modest cost recovery by public and private nonprofit programs, community financing, increases in efficiency, and employment-based programs may make a small contribution.

COPYRIGHT 1991 Department of Health

COPYRIGHT 2004 Gale Group

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