13. Recent Trends and Innovations in Development Assistance for Health

Guatemala has successfully implemented contracting on a large scale with NGOs to deliver health services. The government started the Program to Extend Coverage of Basic Health Services in 1997, soon after the end of a long civil war. The program has continued under successive administrations. By 2000, a total of 89 NGOs were involved in providing health care to about 3.7 million people under 137 contracts.

The contracts specify a range of maternal and child health services, as well as the prevention and treatment of a number of diseases, including malaria. The NGOs are paid about US$8 per person served, mostly in cash, but also in kind in the form of such items as vaccines and medicines. Payments are released quarterly after the NGOs' performance has been checked and verified.

Performance is measured according to a series of indicators, including coverage of immunization and prenatal care, distribution of iron sulfate tablets to pregnant women and to children, and frequency of home visits by NGO outreach staff. The government has hired private firms to develop the monitoring system, which also looks at the NGOs' accounting practices.

The contracting system under the program appears to have resulted in important gains in health service delivery. Immunization rates rose from 69 percent in 1997 to 87 percent in 2001. Household surveys currently under way will be able to assess the program's effect on mothers' and children's health outcomes.

During the program's early years, the government had to overcome a number of obstacles. Government health workers resisted the scheme because they feared that contracting with NGOs was a hidden form of privatization of government health services. The NGOs were initially reluctant to get involved, because they thought that the government was demanding too much in the way of improved performance and also doubted that the government would pay them in a timely manner. Given the financial fragility of many local NGOs in Guatemala, the government had to make advance payments to the NGOs and release quarterly payments without delay to build confidence in the relationship between the public and private sectors.

Source: Hecht 2004; World Bank 2000.