DFID Nepal Family Planning Business Case
Intervention Summary
Addressing Unmet Need for Family Planning among Excluded and Vulnerable Women
in Nepal
What support will the UK provide?
DFID’s contribution to this intervention is £18 million over a period of 4 years (2012-2016).DFID Nepal
has allocated up to £10 million for family planning for the current Operational Plan (2012/13 – 2014/15)
and £8 million for financial years 2015/16 and 2016/17 bringing the total contract value to £18 million.
Why is UK support required?
Fertility has declined over the last 2 decades in Nepal from an average of 5.1 children per women in
1984-6 to the current level of 2.6 andcontraceptive use has increased from 26% in 1996, to 44% in
2006 and is comparable to Bangladesh and India.However, 2011 data indicates that the use of modern
contraceptives in Nepal has stagnated at 43.2%and Nepal is unlikely to meet the 2015 MDG 5
contraceptive prevalence rate target of 67%.
One of the critical explanations for this stagnation in contraceptive use is that the range of methods is
not available to all women, everywhere and not all women are making an informed choice. There are
important disparities in contraceptive use which need to be addressed. For example, modern
contraceptive use is 18% higher in urban than rural areas. There are 11 districts with a contraceptive
prevalence rate of less than 25% and 6 of these are in the poorest and most remote regions of the Mid
and Far West. Rich women are twice as likely to be using contraception as poor women. Muslim and
Dalit women and those with no education have the highest fertility rates at 4.6, 3.9 and 3.9
respectively. Since 2001, female sterilisation has been the most common modern method of
contraception. Currently 15% of married women are sterilised, followed by 9%using injectable
contraceptives, all other modern methods are at negligible levels.
This project will increase demand for, and provide better access to, family planning services for those
women with the greatest need. These are women and young girls who are poor, uneducated, socially
excluded and living in remote areas. DFID has a good track record of pursing equity goals in Nepal so
is well placed to take forward this intervention. As there is very little evidence of how to reach these
groups of women with family planning services, this project will have a separate monitoring and
evaluation component to ensure that the impact of these activities are measured. DFID will not work
through but alongside, the Ministry of Health and Population, to contract non-state providers to
innovate and to generate the evidence of how to deliver services to these women. In year 3, activities
that are successful will be financed through sector budget support and contracted by the Ministry of
Health and Population (MoHP), subject to MoHP demonstrating sufficient commitment and capacity to
manage performance-based contracts for these services and to regulate service providers.
What are the expected results?
We expect that this project will avert 760,000 unintended pregnancies and 130,000 abortions by 2016.
The outcome of the project will be an increase in the use of family planning services for the most
excluded and vulnerable women measured by an increase in the contraceptive prevalence rate and
couple years of protection.The outputs of the project are likely to be:
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DFID Nepal Family Planning Business Case
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Increasing access to family planning services for 1.3 million women, including remote and
excluded women and increasing demand where use is low, such as among adolescents and
some ethnic groups
Expanding the range of contraceptive methods available to excluded and vulnerable women
Evidence to understand determinants of non-use, market and supply chains, and to
demonstrate impact.
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DFID Nepal Family Planning Business Case
Strategic Case
A. Context and need for a DFID intervention
Globally, 215 million women who want to delay or avoid a pregnancy are unable to gain
access to family planning services. Each year there are 75 million unintended pregnancies
with an estimated 44 million ending in induced abortioni. Family planning provides women
with the choice to delay or limit child bearing and has an impact on both the health of the
mother and her child. The risk of an infant dying decreases as the space between births
increaseiiand one third of maternal deaths can be attributed to not using contraceptioniii.
Better family planning represents value for moneyiv, as family planning has direct health
benefits for women but it also benefits society and the environment. Smaller families have
significant economic benefits for society; a family with fewer children ismore able to invest in
children’s health and education and higher investment in each person can lead to more
skilled employment in later life, higher incomes and therefore better standards of living.
Women who are able to plan their families and determine the number, timing and spacing of
their children are key indicators of empowerment and equality in societiesv.
Family Planning in Nepal
Nepal is making good progress on reaching most of the health MDGs, according to the
latest UN data; Nepal has now met the MDG 5 target of reducing the maternal mortality ratio
by ¾ by 2015vi. Fertility has declined in Nepal over the last 2 decades from an average of
5.1 children per women in 1984-6 to the current level of 2.6vii. Modern contraceptive use has
also increased from 26% in 1996, to 44% in 2006viii, and is comparable to Bangladesh (48%)
and India (43%)ix. However, 2011 data indicates that the use of modern contraceptives in
Nepal has stagnated at 43.2%x and Nepal is unlikely to meet the 2015 MDG 5 contraceptive
prevalence rate target of 67%.
Table 1 Fertility, Family Planning Practices by Different Characteristics
Total
fertility
rate
% women using
any
contraception
% women with
no education
% women
with no
exposure to
FP
messages
24
National
3.1
44
53
Geography
Hill &
Mountain
3.1
41
44
15
Terai
Wealth
Poorest
Richest
Brahmin &
Chetri
3.3
50
71
42
4.7
1.9
2.9
33
61
44
58
28
38
17
4
11
Newar
2.4
56
33
12
Janajati
2.9
47
55
22
Madheshi
3.8
44
75
53
Dalit
3.9
41
69
54
Muslim
4.6
17
78
49
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DFID Nepal Family Planning Business Case
Source: Nepal Demographic and Health Survey (NDHS) 2006
One of the critical explanations for this stagnation in contraceptive use is that the range of
methods is not available to all women, everywhere and not all women are making an
informed choice. There are important disparities in contraceptive use which need to be
addressed. For example, modern contraceptive use is 18% higher in urban than rural
areasxi. There are 11 districts with a contraceptive prevalence rate of less than 25% and 6 of
these are in the poorest and most remote regions of the Mid and Far Westxii. Rich women
are twice as likely to be using contraception as poor women. Muslim and Dalit women and
those with no education have the highest fertility rates at 4.6, 3.9 and 3.9 respectivelyxiii.
The range of contraceptives available to women is poor; since 2001, female sterilisation has
been the most common modern method of contraception. Currently 15% of married women
are sterilised, followed by 9% using injectable contraceptives, all other modern methods are
at negligible levels.But it is not clear which factors – convenience, availability, concealment –
make these the two most popular methods. The use of implants and intra uterine devices is
increasing but is still at very low levels of 1.2% and 1.3% respectivelyxiv.
Figure 1 Map of Nepal illustrating Unmet Need for Family Planning among Currently Married Women
Source: Nepal Demographic and Health Survey (NDHS) 2011
Demand for family planning exists; 87% of married women would like to delay the birth of
their next child or want no more childrenxv. Unmet need1 for family planning has been
consistently high among young and rural women and decreases as wealth increases. Unmet
need varies by geographic location (figure 1). There is a higher unmet need among women
who would like to have longer intervals between births rather than women who want to limit
the number of birthsxvi.
In order to further increase demand, the window of opportunity is short as childbearing in
Nepal begins early and peaks in the 20-24 year old age groupxvii. Why women do not use
contraception and the barriers to access need to be better understood. Knowledge is
widespread, but 40% of the poorest women were not exposed to family planning messages
1
Unmet need is defined as the proportion of women who do not want to become pregnant but are not using
contraception.
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DFID Nepal Family Planning Business Case
in the media compared to 10% of the richest women (2011 DHS) and in 2006, 57% of young
women aged 15-29 years were opposed to using contraceptionxviii.
Figure 2 Unmet need for family planning across various countries
Source: Country specific Demographic and Health Surveys
Family Planning Services in Nepal
The Government’s national 5 year health sector plan aims, by 2015, to: reduce the fertility
rate to 2.5; the adolescent fertility rate to 70 births per 1000 15-19 year olds (equivalent to
0.7 of the overall 2.5 TFR); increase the contraceptive prevalence rate to 67% (with
separate, lower, targets for the poor and excluded); provide at least 5 contraceptive methods
at 70% of health facilities and post abortion family planning at 80% of facilitiesxix. These
targets are ambitious; to meet the contraceptive prevalence rate target it would have to
increase by 6 percentage points each year, and to achieve the 5 contraceptive methods
target the Government would need to train at least 665 health workers annually for both
IUCDs and implants, which is five times greater than the number trained in the last fiscal
yearxx.
The Government is still the largest provider of family planning services, with 77% of women
getting contraception from public sector health facilities but with the private sector (13.8%)
and non-government organisations (NGOs) (6%) playing an increasing rolexxi. There has not
been a market segmentation analysis in Nepal but the latest Demographic and Health
Survey indicates that private pharmacies provide more condoms than the public sector and
almost as many pillsxxii. There is anecdotal evidence that emergency contraception, which is
now available in pharmacies, is becoming a method of choice and that abortion, which was
made legal in Nepal in 2002, is increasing with 30% of women visiting abortion clinics having
had more than one abortionxxiii. A million regulated abortions have now been provided in
Nepal since legalisation. Unregulated drugs for medical abortion are also available over the
counter, and are possibly being provided without guidance which could lead to severe
complications.
Commodity security
The Government provides 87% of contraceptives for public facilities and also provides to
some major NGOs. Nepal has been procuring contraceptives since 2001 and the budget
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DFID Nepal Family Planning Business Case
has increased by 118% from 2008/9 to 2009/10. Pills, injectables, implants, IUCDs,
condoms and emergency contraception – i.e. the full method mix -areincluded in the
essential drugs listxxiv. A web-based logistics management information system was set up 3
years ago but data collection at district level and below is still manual with a corresponding
three month time lag. The existing reproductive health commodity security strategy (200711) is being updated and provides an opportunity to re-assess the quantity and range of
commodities procured.
Reported stock outs of reproductive health commodities procured by Government are less
than 5% on average and almost all central, regional and district stores have not reported
stock outs for the past three yearsxxv. However, little is known about supply chain
management and availability beyond the district stores and there are reports from NGOs,
who rely on public sector commodities, that supply is erratic. Commodities are also procured
by the non-state sector, the Nepal Contraceptive Retail Store has an extensive distribution
network involving private pharmacies and a logistics support system – its condoms and
reproductive health products are available in all districts of the country.
Financing
The Government provides commodities free to public and non-state health facilities and
nearly 70% of family planning users in Nepal do not pay for contraceptivesxxvi. Of those who
pay, in government facilities, users can be charged a nominal registration fee and in nonstate facilities a registration, consulting fee and service charge are levied. Prices vary
between commodities but on average an injectable contraceptive lasting three months costs
about NRs. 45 (UK £0.35), pills from NRs 12-35 (UK £0.09-0.27) for a month’s supply and
condoms from NRs 8-150 (UK £0.06-1.20) for a box. Conversely, for the past 27 years, men
and women have been paid NRs 125 (UK £0.95) to be sterilised which could account for the
high sterilisation rates, especially among the poorxxvii.
Non-state providers
Non-state providers include formal health providers with qualified health staff or a licensed
facility, and informal providers including unlicensed drug shops, traditional healers and
‘quacks’. For the purpose of this business case, we will refer to non-state providers as
formal health care providers using qualified health staff which can be for-profit and not-forprofit.
Social marketing and social franchising play a small butincreasing role in family planning
provision in Nepal. Social marketing focuses on making contraceptive commodities more
widely available in commercial retail outlets and on promoting these contraceptives to
consumers through small and large scale behavioural change activities or marketing
campaignsxxviii. Social marketing programmes in Nepal are not designed to be pro-poor but
well-designed programmes can increase the availability of commodities to the poor. In
Nepal, the largest player in social marketing is Contraceptive Retail Sales (CRS) which
provides condoms, pills, injectables, IUCDs and implants to non-state outlets across the
country, and Population Services International (PSI) who socially markets medical abortion
pills.
Social franchising is a type of contracting whereby a non-state provider providing clinic
based servicesagrees to join a branded franchised chain and maintain certain quality
standards and often an agreed fee structure. In exchange, the franchising agent may offer
management support, training, advertising, product supply, or equipment. Customers gain
the assurance of knowing that when they see the social franchising kitemark, quality and
price regulation are likely to be in place.In Nepal, there isn’t a social franchising network as
such which tends to work with the more formal private sector but both Marie Stopes
International (MSI) and its local commercial franchise partner Sunaulo Parivar Nepal (SPN)
and the International Planned Parent Federation (IPPF) and its local affiliated partner the
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DFID Nepal Family Planning Business Case
Family Planning Association of Nepal (FPAN) have networks of well-established clinic based
services. SPN has the largest network of clinics outside the Government, with 52 clinics in
41 districts offering the full range of contraceptive methods. It receives the majority of its
commodities from Government. They claim that they provide more than half of all the
sterilisations in Nepal and ¾ of all abortions. FPAN has clinics in 28 districts which also offer
the full range of contraceptive methods and PSI has 480 social franchisees but only
providing IUCDs.
Data and evidence
Information on family planning use is available from regular surveys (DHS, Multiple Indicator
Cluster Surveys, Nepal Living Standard Surveys) and between surveys from the Ministry of
Health and Population’s routine data collection. However, much of the recentdata needs to
be disaggregated and analysed by wealth, ethnicity and geographic region which will give a
better understanding of the distribution of non-use amongst poor and rural populations.
There is still a need for more detailed information on the reasons for not using contraception,
on procurement and the supply chain, a market analysis and consumer preferences that
determine the pockets of unmet need.
Need for DFID intervention
In December 2010, DFID published its Global Framework for Results for improving
reproductive, maternal and new born health in the developing world, which includes
ambitions to expand cost-effective interventions for family planning and empower women
and girls to make healthy reproductive choices. DFID Nepal has secured additional funding
to support the delivery of the Global Framework’s family planning objective and the related
results in its own operational plan.
Ensuring that all women have a healthy reproductive life requires a strong health system
that can deliver responsive and high quality services. DFID Nepal is a key donor in the
health sector and is providing sector budget support to strengthen the public health system
and technical support to help the Ministry of Health and Populationimplement the current 5year health strategy, including developing a new family planning strategy. DFID has been
the key strategic partner to the Ministry of Health and Population in safer motherhood,
investing in this area for more than 15 years.Safer motherhood is now firmly embedded in
the policies and strategies of the Ministry of Health and Population and is supported by
flagship Government programmes such as the maternity incentive scheme, the
comprehensive emergency obstetric care fund and safe abortion. A focus on reproductive
health and family planning is the last critical step towards better health of mothers and their
new-borns.
Family planning is underfunded in Nepalxxix and there is unpredictability of support from
donors. This project will aim to complement the work of others, in particular USAID, who to
date, hasbeen a key player in family planning in Nepal, and the Government of Nepal. It will
aim to reach women and young girls who are poor, uneducated, socially vulnerable and
living in remote areas. DFID has a good track record of pursing equity goals in Nepal. DFID
can also use various aid modalities, work in both the non-state and public sectors and can if
needed, address safe abortion as well as family planning, unlike other donors. If DFID were
not able to provide additional funding to determine the best ways to address the remaining
pockets of unmet need it is likely that the disparities in family planning use and provision
would widen, especially given that Government funding in health will not grow in 2012/13 in
real terms, for the first time in at least seven years; in addition, the political situation means
that there is a high likelihood that the full budget will not be spent.
B. Impact and Outcome that we expect to achieve
The goal of the project will be improved maternal health and neonatal survival, measured at
impact level by unintended pregnancies and abortions averted. We expect that this project
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DFID Nepal Family Planning Business Case
will avert 760,000unintended pregnancies and 131,000 abortions by 2016, of which 400,000
unintended pregnancies will be delivered within the current DFID Nepal operational plan.
The outcome of the project will be an increase in the use of family planning services for the
most excluded and vulnerable women measured by an increase in the contraceptive
prevalence rate and couple years of protection.
The outputs of the project are likely to be:
- Increasing access to family planning services for 1.3 million women, especially for
remote and excluded womenand increasing demand where use is low, such as
among adolescents and some ethnic groups
- Expanding the range of contraceptive methods available to excluded and vulnerable
women
- Evidence to understand determinants of non-use, market and supply chains, and to
demonstrate impact.
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DFID Nepal Family Planning Business Case
Appraisal Case
A. What are the feasible options that address the need set out in the Strategic Case?
The strategic case and corresponding options are generated to be able to deliver a
particular theory of change, which assumes that additional DFID resources will increase the
availability and choice of reproductive health commodities; increase access to family
planning services for the excluded and vulnerable and generate evidence of how best the
excluded and vulnerable are reached. The strength of the evidence underpinning this theory
of change is discussed in section B in detail and is illustrate in figure 3 by the size of the
arrows from outcome to impact and wider impacts respectively – a larger arrow indicating
stronger evidence.
Figure 3 Theory of Change
Description of the intervention
This project will focus on delivering services to the most excluded and vulnerable women of
Nepal. The exact amounts of investment in each aspect of the theory of change in order to
deliver family planning activities will be developed during the contracting and inception
phase. However, the range of activities willinclude:
Procurement activities
- Strengthening Governmentforecasting capacity, data management and coordination
- Strengthening Governmentsupply chain management and logistics
- Strengthening Government regulation capability
- Contracting out Governmentsupply chain management in selected districts to the
private sector
Service delivery activities
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DFID Nepal Family Planning Business Case
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Expanding family planning services in districts with low contraceptive prevalence
rates with better clinic based and outreach services
Innovative approaches to increasing access such as integrating some family
planning commodities with Governmentimmunisation days
Expanding social marketing for niche products to particular target groups
Increasing demand with specific techniques tailored to particular groups
Generating the evidence
- Research to better understand determinants of unmet need, including for the wives
of migrants and unmarried adolescents
- Operational research to understand non-use among particular groups
- Market segmentation analysis and commodity tracking surveys
- Baseline and end line studies to demonstrate success
The options and counterfactual as part of this business case are:
Option 0: Do nothing – the counterfactual
Without additional DFID funding for family planning, DFID would still continue to invest in
family planning through the existing sector wide approach (SWAp). Under this option it is
likely that Nepal’s family planning situation would continue on the same trajectory – that is
fertility would continue to fall but soon plateau, contraceptive prevalence rates would remain
stable and disparities in access to and use of contraception would remain and potentially
increase. The public sector would continue to be the main provider of family planning
services but with limited reach, especially given increasing budget constraints, and private
provision would increase for those who can afford the services. USAID will continue to invest
in family planning expanding the range and availability of methods and without an explicit
equity focus.
Option 1: Public sector provision
Additional funding for family planning would be channelled through the existing SWAp and
the corresponding DFID managed technical assistance programme. Earmarking funds to be
spent on family planning only was not considered as an option as DFID has moved away
from this approach in the previous SWAp and in terms of aid effectiveness, it is not
considered good practice. The Government would set up a series of family planning
activities designed to reach vulnerable and excluded women and the technical assistance
programme would manage the monitoring and evaluation of the service delivery activities.
Additional resources, in terms of manpower and equipment would be allocated to strengthen
the reproductive health commodities logistics information system and innovative strategies
to improve supply chain management would be set up and evaluated.
Option 2: Non-state sector provision
Additional funding for family planning would be channelled to non-state providers via DFID’s
global Reproductive Health Framework Agreement. The non-state sector would set up a
series of family planning activities designed to reach vulnerable and excluded women and a
separate tender for the monitoring and evaluation of the activities would be issued. As in
Option 1, the public sector procurement and delivering of reproductive health commodities
would be strengthened by supporting the logistics information system and developing
innovative strategies to improve supply chain management that would be set up and
evaluated. Support to Government would ensure that they were able to take over
management of the contracts in due course (subject to capacity and commitment
benchmarks.
B. Assessing the strength of the evidence base for each feasible option
This assessment is provided throughout the supporting text below, and summarised in the
following table:
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DFID Nepal Family Planning Business Case
Options
Overarching
evidence base
Strength
evidence
Strong
of
Option 1
public sector
Medium/limited
Option 2nonstate sector
Medium/limited
Rationale for Assessment
A wide range of evidence for the relationship between family
planning and fewer unintended pregnancies exits. There is also
good evidence on the relationship with fewer pregnancies and
better maternal and new born health. There is limited evidence
for the impact of family size on household income.
There are a few studies with rigorous designs that indicate the
impact of community based distribution implemented through the
public sector, and cross sectional data on outreach services. But
no evidence to support a greaterimpact on equity from family
planning services delivered through Government.
There are systematic reviews of social marketing and social
franchising in the non-state sector with strong evidence on their
impact on access to family planning and moderate or limited
evidence to support impacts on equity.
The evidence of the relationship between increased use of family planning and fewer
unintended pregnancies and safe abortions is strongxxxxxxixxxii.Interestingly this relationship
doesn’t hold for unsafe abortions with the global safe abortion rate changing little from 1995
to 2003xxxiii.The evidence is also strong for increased family planning use and decreasing
fertilityxxxivxxxvbut the correlation is stronger with the use of contraceptives for limiting family
size than for spacing the years between birthsxxxvi.This is unfortunate, as there is a strong
correlation between an approximate 2 year gap between births and better new born
outcomes, in particular low birth weightxxxviixxxviii. Family planning use reduces maternal
mortality by reducing the number of births and therefore the number of times a women is
exposed to the risk of mortality. It also reduces high-risk births such as those women with
high parity (above 5). The evidence for this relationship from a synthesis of 146 cross
sectional surveys is strongxxxix. An analysis of cross sectional survey data in four countries of
sub Saharan Africa indicated that there is a relationship between more empowered women
and contraceptive usexl.
There is surprisingly little evidence on how best to deliver family planning services; this is
partly because it is difficult to separate the public and non-state sectors. For example, public
sector finance can be used to fund non-state partners to deliver certain services, such as
social marketing that are then classified in surveys as ‘private.’ Also, in many countries,
governments provide reproductive health commodities free to all service providers in the
country, including the non-state sector. The evidence for different kinds of service delivery
points (clinics, outreach services, social marketing, social franchising) increasing family
planning use in general and decreasing equity is therefore examined.
In general, public sector family planning programmes tend to increase uptake with varying
levels and degrees of effort – but the evidence is mixedxli. The public sector in many
countries has tried to increase utilisation by the poorest through mobile outreach services
and community based distribution. Cross sectional utilisation data indicates that outreach
plays an important role in expanding access to modern contraceptives. In Nepal, for
example, the 2011 DHS indicates that government mobile clinics were the source of
contraception for 13% of all users of modern methods, 19% of female sterilisations, and
32% of male sterilisations.The only two rigorous evaluations of the impact ofcommunity
based family planning distribution have been in Matlab in Bangladeshxlii and Navrongo in
Ghanaxliiiboth of which demonstrated in impact on fertility. There is some evidence form
Madagascarxlivand Kenyaxlv which indicates that increasing awareness and knowledge
through community based approaches can stimulate demand for family planning services.
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Social franchising and social marketing are two key non-state delivery mechanisms. Social
franchising is being implemented in many developing countries but there is still limited
research-based evidence of the impact on increasing access to family planning by the
poorest and most vulnerable groups. A 2008 Cochrane Review found no studies on social
franchises meeting their stringent criteria.xlvi A more recent 2010, systematic review with less
stringent criteria reviewed six social franchising studiesxlvii and concluded that there was
strong evidence of impact of franchising to increase family planning use and moderate
evidence of increased use by the poor. A DFID funded systematic review of 29 African
social marketing programmes concluded that there was a positive impact on access to
contraceptive services and products, and in increasing client’s knowledgexlviii. There was not
enough evidence to support social marketing’s impact on equity. This is not surprising: since
social marketing usually links to commodities for which consumers must pay, there is a
financial barrier to access. There is little evidence on the impact of social marketing
combined with fully-subsidised commodities and services, which is the approach that we
would pursue under options 1 or 2.
Given the lack of evidence for both the public and non-state sector delivering family planning
programmes to the most vulnerable and excluded women; it will be important for the
evaluation component of this project to be robust enough to demonstrate impact.
C. What are the costs and benefits of each feasible option?
Summary
This section summarises the results of the economic appraisal which is attached as Annex
4, key findings from the analysis are presented in Table 1below.
Table 1: Summary of Cost Benefit Results2
Option 1 (Public sector)
Option 2 (Non-state sector)
Financial investment from DFID
£18m
£18m
Net present value
-£1.62m
£1.79m
Cost: Benefit ratio
-4.4
1.12
Internal rate of return
0.89
5.8
DALYs averted
263,800
343,138
Cost per DALY averted
£85
£76
Cost per CYP
£6.98
£5.36
Table 1indicates that delivering family planning services through the non-state sector is
more cost effective than through the public sector, with Option 2having better cost
effectiveness ratio and greater benefits in terms of CYPs and DALYs. There are important
qualitative differences between the two options, especially given the private sector’s greater
focus on demand creation, which strengthens the case for option 2, since we judge that lack
of awareness and demand is likely to be a greater problem for vulnerable and excluded
women than lack of supply. In terms of efficiency and effectiveness, Option 2 is likely to
score higher given that a competitive tender will outline incentives for the non-state sector to
2
The Net Present Value (NPV) is weak for Option 2 but the cost per DALY averted is reasonably strong. One of
the reasons for such a weak NPV is that not all of the benefits accrued could be modelled.
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use public (DFID) subsidy to deliver services to vulnerable women, whereas the Nepal
public sector does not have a demonstrated track record in this area. Delivering services
through the public sector wouldbe more sustainable in the long term, and so steps will be
taken to address sustainability within the design of Option 2. However both options remain
extremely cost effective; WHO guidance indicates that an intervention is cost effective if the
cost per DALY averted is less than the GNI per capita. Nepal’sGNI per capita is currently
£2753 with cost per DALY for option 2 at £76, just 28% of GNI.
Sensitivity analyses were conducted with the following scenarios: costs were doubled but
impacts remain constant; reducing service delivery probability to 40%; and varying the
discount rates. The cost per DALY for option 1 varied from £85 (baseline) to £225 (close to
GNI) and for option 2 from £76 (baseline) to £108 (less than half of GNI) which confirms the
finding that option 2 continues to be highly cost effective.
Brief Overview of the Methodology
Estimation of CYPs
The number of family planning methods to be taken up per year (new users and existing
users who are switching to other methods) was estimated from public and non state sector
data and are converted to CYPs using standard USAID conversion factors. CYPs were
adjusted for discontinuation rates (the number of women who will stop using a method and
who switch to another method) and new users (first time family planning users).
Estimation of benefits
There are a number of benefits to the individuals and society as a whole, as a consequence
of implementing this project. Only gains that are incremental to the counterfactual and can
be monetised and reliably estimated have been included in the benefit calculation. Benefits
include:



A reduction in unintended pregnancies
An improvement in maternal and infant health due to less abortions and
pregnancy complications, including a reduction in infant and maternal mortality
System and societal benefits such as savings in healthcare costs which would
otherwise have been borne by individuals and families and enable them to use
income for other non-healthcare related activities
It is more difficult to estimate potential benefits, such as the improved household economics
of smaller family size, and have not been included.
Cost savings
Increasing family planning use, leads to a reduction in unintended pregnancies and
therefore lower health care costs for maternity and newborn care. The MSI impact calculator
estimates healthcare savings based on assumptions that all women who need healthcare
facilities will have access to it. This is not a reasonable assumption for Nepal and
information from survey data indicates that the most vulnerable and excluded women have
less antenatal care visits and fewer give birth in institutions than the national averagexlix. This
was translated into an assumption that only 20% of the target women currently have access
to health services and therefore the cost savings are reduced by 80%.
Health impacts
Health impacts (maternal and child mortality) were estimated using the MSI Impact
calculator which provides country specific estimates of benefits that that one CYP gives rise
to in terms of the number of deaths, abortions and health complications that would be
averted by the number of unintended pregnancies averted. Health impacts were also
expressed as DALYs.Where interventions lead to multiple outputs it is helpful if they can be
3
World Bank 2011
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DFID Nepal Family Planning Business Case
expressed in a common unit. The disability adjusted life year (DALY) is a measure of overall
disease burden expressed as the number of years lost due to ill health, disability or early
death. One DALY, therefore, is equal to one year of healthy life lost.
Risk adjustments and Sensitivity Analysis
The MSI impact estimator assumes that services will be delivered with 100% certainty but
there are risks that will reduce the probability of delivering. Full details can be found in the
social and political and economic annexes but in summary, the public sector suffers from
delays in the release of the budget, in the supply of commodities and staff absenteeism. The
non state sector is more efficient but will need to change its internal incentives to deliver for
this particular target group. Based on this analysis it was estimated that the public sector
has a 65% probability of successful delivery, and the private sector has an 85% and the
benefits were discounted by 35% and 15% respectively.
A sensitivity analysis was carried out to test the robustness of the modelling to identify if any
variables had a large effect on the project impacts and to assess whether the ranking of the
options was robust. The following scenarios were tested:

Doubling costs, keeping impacts constant – this covers all cost drivers, so looks at
the risk of a catastrophic cost increase from any source.

Reducing the probability of delivery from 65% or 85% to 40% for both options and
looks at the risk of a significant disappointment in terms of programme effectiveness.

Varied cost discount rates: 6% and 10%.
Detailed results of cost benefit analysis for each option
Table 2: Budget allocated for the intervention
Years
2013/14
2013/15
2015/16
2016/17
Total
Start up costs4
500,000
TA logistics and service contracts
333,333
333,333
333,333
333,333
1,000,000
3,716,667
4,216,667
3,216,667
3,456,667
15,196,667
450,000
450,000
450,000
120,000
1,470,000
Service delivery including
commodities
M&E including evaluation
500,000
10% DFID staff FTE
15,000
15,000
15,000
15,000
60,000
Total (undiscounted)
5,015,000
5,015,000
4,015,000
4,015,000
18,060,000
1.000
0.971
0.943
0.915
5,015,000
4,868,932
3,784,523
3,674,294
Discount factor3%5
Total (Present value of costs)
16,527,458
As neither the public or the non-state sector is actively delivering services to the most
vulnerable and excluded women in Nepal there is no actual data on the costs. The cost data
has been estimated, and is prone to a relatively high margin of error (at least +- 20%). Public
sector data for the national service delivery was examinedand adjusted upwards to allow for
the greater costs in reaching vulnerable and excluded women, such as more demand
creation activities and greater transport costs due to the remote locations of some women.
4Start-up
costs are not charged to Option 1 as the infrastructure is already in place and for this option these
funds are allocated to service delivery.
5On discussions with Julia Watson in Feb 2012 it was decided to use a discount rate of 3% for costs and benefits
for consistency, as DALYs are always estimated at 3%.
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DFID Nepal Family Planning Business Case
In order to address this uncertainty one of the options for the sensitivity analysis was a
doubling of costs with the same impacts.
DFID has allocated approximately £15m to service delivery. The M&E component includes
the evaluation budget and DFID Nepal’s 2012 Evaluation Strategy recommends that
between 2-5% of the overall project budget should be allocated to M&E. Consultations with
family planning organisations such as MSI and PSIsuggested allocating 10% of the service
delivery budget to M&E. As this component will have robust and rigorous evaluations the
upper end of the range has been included in the budget. An estimate 10% of DFID staff time
has been included, to allow for time needed to drive the research agenda, as well as general
supervision and transactions with the service providers.
Option 0: Do nothing – the counterfactual
For this option, there are no costs to DFID.In terms of benefits, this depends on whether any
of the activities would take place anyway in the without project case.Given that the
intervention aims to target new adopters amongthe most vulnerable, excluded and hard to
reach women who would not otherwise access services, this would suggest that the
intervention benefits are incremental to the counterfactual, and so would not happen in the
absence of the project.
If other donors are likely to fund this type of intervention, it is arguable that such benefits
could accrue in the counterfactual scenario. However, there are no indications that such
plansexist, though it is possible that USAID could decide to fund a similar intervention. It is
also possible that Government or private funding might fill this gap, but both are unlikely as
the women who will be targeted by this project are not buying the services at present and
the Government of Nepal faces fiscal restraints and already allocates high amounts to health
relative to other countries in the region. It is therefore reasonable to conclude that there will
be no incremental benefits in the counterfactual scenario.
Option 1: Public Sector
Major cost categories
The adjusted national budget for family planning per year is £9.6m. The national budget for
Nepal’s family planning programme does not include any provision for capital costs or staff
salaries. Forty-five per cent of the total budget is added to cover staff salaries. This has
been calculated by estimating the number of staff required to implement a project of this size
using data from the non-state sector, and then adjusting costs in line with the differential
between state and non-state salaries (public salaries are lower. Again based on non state
data, an additional 10% was added to account for capital costs.Demand creation costs are
considered low compared to international experience and increased from 0.1% to 0.2% and
commodity procurement was increased by 15% to account for greater transport costs to
remote areas.
Table 1: Adjusted annual national summarised budget for service delivery through public
sector
Cost category
£
% of total
Demand creation
17,920
0.2%
Commodity costs
3,686,225
38.2%
Training costs
52,899
0.5%
Equipment
75,145
0.8%
451,135
4.7%
Abortion costs
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DFID Nepal Family Planning Business Case
wages and capital costs
5,354,154
55.6%
Total
9,637,478
100.00%
Source: Ministry of Health and Population national budget data 2011/12 and 2012/13 including Economist’s
estimated adjustments. No allowance for inflation, and exchange rate set at NRs 138 per £.
Results of benefits modelling
In Option 1, the health care savings do not offset the costs, demonstrating poor value for
money. The healthcare savings give rise to a NPV of -£1.62m and a benefit to cost ratio of 4.4. The number of CYPs are estimated from the national budget and reduced by 10% to
account for the skew towards short term methods (as sterilisation gives rise to relatively
more CYPs and the project seeks to reduce emphasis on sterilisation). This generates an
estimated cost/CYP for Option 1, with costs discounted at 3%, is £6.98.
Health impacts
Table 4: Health impacts averted
Option 1
Unintended pregnancies averted
Abortions averted
Maternal deaths averted
Child deaths averted
588,071
101,029
920
5,602
Sensitivity analysis
Table 5: Sensitivity analysis
Baseline
(central
case
scenario)
Scenario 2:
Doubling
budget, CYPs
constant
Scenario 3:
Delivery
probability
40%
Scenario 4:
Discount
rate 6%
Scenario 5:
Discount
rate 10%
Cost per CYP
£6.98
£13.95
£11.34
£6.70
£6.37
Cost per DALY
£85.18
£170.13
£224.92
£81.83
£77.82
Unintended preg
averted
588,071
588,071
361,890
588,071
588,071
Abortions averted
101,02
101,029
62,172
101,029
101,029
Maternal deaths
averted
920
920
566
920
920
5,602
5,602
3,448
5,602
5,602
263,800
263,800
162,339
263,800
263,800
Child deaths
averted
DALYs averted
Option 2: Non-state sector
Major cost categories
Given that none of the non-state sector providers in Nepal deliver services directly to
excluded and vulnerable women, there is no data readily available to compare costs with the
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DFID Nepal Family Planning Business Case
public sector. One service provider gave estimates of the cost of standard service delivery in
Nepal and estimates of the level of services that could be delivered with these costs and the
breakdown of these costs is shown in shown in Table 6.
Table 6: Cost for Family Planning Services by a Non-state Sector Provider in Nepal, 2011
Cost commodity
2011 Budget £
% of total
Service provider salaries
351,835
18%
Supplies
233,920
12%
Performance related pay
116,138
6%
Non service provider salaries
702,304
35%
Training, recruitment & staff welfare
87,861
4%
Travel & per diem expenses
189,364
9%
Marketing, fundraising & promotional costs
32,492
2%
Office & building costs
192,703
10%
Financial/professional/other costs
20,354
1%
Other capital expenditures
49,472
2%
Other
17,051
1%
Total
1,993,494
100%
The budget above does not include any additional costs associated with reaching vulnerable
and excluded women, such as more demand side activities, transport and logistics. The
demand creation costs therefore, are set at 4% of service delivery costs which is much
higher than in the public sector. The budget is increased by 7.3% for the provision of
abortion services and 4% for M&E.
Results of benefits modelling
In Option 2, the health care savings alone more than offset the costs, showing very good
value for money. The healthcare savings give rise to a NPV of £1.79m and a benefit to cost
ratio of 1.12. The cost per DALY for Option 2 is £76 and results in a figure of £5.36 per CYP.
Health impacts
Table 7: Health impacts averted
Option 2
Unintended pregnancies averted
Abortions averted
Maternal deaths averted
Child deaths averted
764,931
131,413
1,197
7,287
Sensitivity analysis
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DFID Nepal Family Planning Business Case
Table 8: Sensitivity analysis
-
Cost per CYP
Cost per DALY
Unintended preg
averted
Baseline
(central case
scenario)
Scenario 3:
Delivery
probability
60%
Scenario 4:
Discount
rate 6%
Scenario 5:
Discount
rate 10%
£5.36
£76.66
Scenario 2:
Doubling
budget,
CYPs
constant
£10.73
£153.32
£7.60
£108.60
£5.16
£73.65
£4.90
£70.04
764,931
764,931
539,951
764,931
764,931
131,413
131,413
92,762
131,413
131,413
1,197
1,197
845
1,197
1,197
7,287
7,287
5,144
7,287
7,287
Abortions averted
Maternal deaths
averted
Child deaths
averted
Summary of Political, Institutional and Social Appraisals
The full political, institutional and social appraisalscan be found in annexes 5 and 6;the key
points are summarised here.There are four main political factors that may impact the project
which include:
Political uncertainty. This project is likely to be affected by high levels of political instability
and uncertainty over the structure of the state over the next 1-2 years in Nepal, and possibly
beyond. Nepal’s political situation has changed fundamentally since 27th May 2012, when
the four-year old Constituent Assembly was dissolved without promulgating the Constitution.
Currently, there is significant political uncertainty - which is likely to continue over the next
few months.In comparative terms, the Ministry of Health and Population is relatively less
affected by political interference - evident by Nepal’s good progress on key health indicators
including rising utilisation of public health services. However, since the political leadership is
preoccupied with wider political deals,new policy initiatives cannot be expected to be
supported.
Federalism. This is possibly the most contentious challenge facing Nepal. There are huge
uncertainties about the number of provinces, basis of provincial divisions, their boundaries,
future inter-governmental revenue and expenditure assignments and service delivery
responsibilities. This project needs to link with and benefit from the DFID supported
technical work on federalism and should be flexible to adapt to the federal structure once
political agreements are reached. Arguably, holding service provision at arm’s length from
the state during the transition to a federal structure will minimise the likelihood of impact
from state restructuring, and would therefore favour Option 2.
Local government.Local elections have not been held since 2002which has left local
government in a political vacuum. As a result, the Local Development Officer acts as the
Chair of the District Development Committee instead of an elected political representative.
The key implicationis that it reduces the convening power of the local governing bodies and
reduces the ability to plan and monitor health programmes jointly with local government. The
risk of corruption and undue political interference remains and it allows for continued levels
of absenteeism at the lowest levels of administration with weak local accountability.
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DFID Nepal Family Planning Business Case
Gender and Social Inclusion. This project needs to pay attention to whether civil service
officials in the sector respond to the priorities of the target groups, in particular the excluded
and most vulnerable women. Relevant to this is the impressive but yet un-implemented
framework for Gender and Social Inclusion for the health sector (see social appraisal, annex
6).
Option 1: Public Sector
The Government has by far the widest reach of any health service provider in Nepal and a
range of family planning commodities should be available in all health facilities. Most of the
long acting or permanent methods need skilled health workers to administer but more
temporary methods such as injectables, pills and condoms are distributed by community
health volunteers orare available over the counter. There is little information on the
effectiveness of delivering family planning services per se, but given that these services are
delivered through the public health system we can assume that the same issues of
effectiveness apply.
The Ministry of Health and Population recognises that different strategies are needed to
deliver services to excluded and vulnerable people. As part of the current 5 year health
sector plan the Ministry of Health and Population developed a Gender and Social Exclusion
framework and a set of Remote Area Guidelines, and although exemplary, neither has been
implemented to date and is a reflection of the lack of leadership to implement such
progressive policies. There is evidence that the public health service is only just managing to
provide the minimum of services to the population. In 2011, Nepal had0.04 doctors per 1000
population and 0.23 nursesl which are significantly lower than the WHO recommendation of
2.3 health workers per 1000 population. There appears to be sufficient numbers of health
workers trained in Nepal, the critical issue is attracting staff to work in the public sector and
once employed; their deployment, distribution and retention. For example, in 2009, of
approximately 8,000 doctors registered in Nepal, only 1,000 were working in government
positionsli.
The public health sector has 30,000 sanctioned posts but not all are filled; in the Central
region 86% of all doctor’s positions are filled compared to 61% in the Mid-Western regionlii.
Even when posts are filled, absenteeism is common – approximately 13% of facilities report
being understaffed due to absenteeismliii. Even when health workers are in post, drugs may
not be available to treat patients; between March 2008 and 2009, 75% of lower level
facilities (health posts and sub-health posts) had drug stock outsliv. Reported stock outs of
family planning commodities at central, regional and district stores are much less, 5% on
averagelv. However, little is known about how long it takes to deliver commodities to lower
level facilities. There also the question of the quality of services, with approximately 10% of
people being “scolded” by health providerslvi and only 30% of women who had sterilisations
being informed of alternative family planning methodslvii.
The Ministry of Health and Population budget for family planning services has increased
alongside the budget for commodities but the general weaknesses that are seen in planning,
delivery and financing also apply to family planning. For example, late approval of the
annual budget leads to poor execution and planning. Procurement capacity is weak and
increasing politicization, intimidation and cartelling opportunities alongside poor internal and
external controlsexacerbate corrupt practices.
If the public sector was chosen as an option some activities, such as behaviour change or
supply chainmanagement, mightstill need to be contracted by the Ministry of Health and
Population and the Logistics Management Division would bethe obvious procuring entity for
these services (subsequent contract management would probably be by Family Health
Division). In this regard, the recent experience with migrating HIV prevention service
contracts into the public sector will need to be closely examined. It is recommended that the
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DFID Nepal Family Planning Business Case
project considers providing technical assistance to Government to support service
contractingand regulation capability over the project period and generates indicators for
measuring Government’s capability in delivering this role.
Option 2: Non-state sector
The private commercial sector (18.5%) and NGOs (8.5%) have been playing an increasing
role in providing family planning serviceslviii. There has not been a market segmentation
analysis in Nepal but the latest DHS survey indicates that private pharmacies provide more
condoms than the public sector and almost as many pillslix. The two most popular methods
among the poor, those with no education and living in rural areas are female sterilisation and
injectable contraceptives of which the non-state sector provides nearly one third (nearly 22%
of female sterilisations, 30% of injectables)lx.
Non-state providers in general levy a registration; consulting fee and service charge. The
service charge is waived if they receive commodities from the Government. There hasn’t
been any research assessing the quality of care for family planning services in the public
and non-state sectors but the latest DHS survey indicates that the non-state sector is better
at informing clients about side effects of contraceptive methods but the public sector are
better at offering women more choicelxi.
The cost of delivering clinic based family planning services through the non-state sector is
more than the public sector in Nepal. So if this option were chosen cost data would need to
be collected to ensure that services are affordable for the public sector to finance. Getting
the non-state sector to change its funding model from, in general, serving wealthier users
with a fee-paying service, to delivering for the most excluded and vulnerable, will be a
challenge, but can be addressed by ensuring that the non-state sector has aneconomically
viable contract and will receive timely and adequate funding.
One of the activities to be considered during the implementation phase is the contracting out
to the private sector of supply chain management of district level reproductive health
commodities. Critical issues to consider would be whether there are enough private sector
suppliers, and the ability of the Government to manage service contracts in the long term. If
staff are contractedin to manage supply chain management it will be important to
understand what USAID’s role in this area.
Summary of climate and environment appraisal
The full climate and environment appraisal can be found in annex 8. The project will not
have major climate and environmental impacts. Family planning services can directly
contribute to conservation of natural resources by reducing population growth which has
often been cited as a central cause of forest depletion and degradation in Nepal. Access to
family planning services could lead to better economic empowerment and more climate
resilience, in terms of more access to credit and technology.
In terms of delivery options, climate and environmental benefits will be maximised through
option 1 essentially due to the scale of the Government’s family planning programmes. But
option 2 offers opportunities for non-state sector organisations to link better with community
based organizations and social enterprises for meeting both family planning and
environmental objectives.
Summary of conflict appraisal
The full conflict appraisal can be found in annex 7. Family planning is not considered a
contentious intervention in Nepal; awareness is widespread, fertility is declining and the
desire for smaller families existslxii. The Government already provides commodities to nonstate sector providers and under the new family planning strategy is considering formalising
this relationship further. However, Nepal will transit to a federal structure sometime in the
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near future and if this structure is defined by ethnicity, as certain stakeholders are proposing,
then population size and growth, could emerge as a political issue. This would be relatively
simple to refute, given the wide coverage of the project and that it will focus on district level
interventions but this risk will need to be actively monitored as part of the risk mitigation
strategy.
The most likely conflict and peace building risks and opportunities relate to how the project
is implemented, and its potential impact on citizen perceptions of the state. At a practical
level, potential political and criminal distortion of contractor selection in Option 1 will need to
be countered by robust and transparent selection processes.Every effort will need to be
made to recruit qualified staff from the geographical areas they will work in. And finally, while
strict financial systems will be the cornerstone of reducing the risk of corruption, use of third
party monitoring and public audits may also further help build public confidence.
While DFID generally delivers health services through the Ministry of Health and Population,
its capacity to address inequality and reach the most excluded and vulnerable groups in
society isyet to be demonstrated, as is its capacity to manage service contracts efficiently
and effectively.Given that these two challenges lie at the heart of this project, Option 1 is not
recommended.Option 2 is considered more likely to meet these challenges, and is therefore
the preferred option.The only caveat is that delivery through the non-state sector may
reinforce a public perception that the state is either unable or unwilling to provide expected
services.To minimise this, everything possible must be done to publicly demonstrate a
sense of partnership between the project and government.
D. What measures can be used to assess Value for Money for the intervention?
Data will be collected over the four year period to verify or not, the theory of change and
theassumptions in the economic appraisal. In addition, the series of evaluations provide an
opportunity to collect a wider range of data which is particularly important giventhe lack of
conclusive empirical evidence on delivering family planning services to vulnerable and
excluded women. Proposed measures include:
Impact level


Demographics – income, ethnicity, marital status, age, and so on
Net present value, cost per DALY
Outcome level
 Cost per CYP
 Baseline and end line CYP
 Baseline and endline contraceptive prevalence rate
Output level
 Cost per beneficiary
 Cost per outreach unit
 Cost per abortion
 Verification of whether family planning users are new adopters or switchers
Input level (these need to be bench marked with other projects to have a true understanding
of whether they do offer VFM)
 Administration to project costs (within 10% to 20% range)
 Accommodation costs incurred for service delivery
 Operational research costs
 Demand creation costs, benchmarked against projects in other countries
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DFID Nepal Family Planning Business Case

Evidence of scale or scope economies, or benefiting from sunk costs of existing
infrastructure/cost sharing
E. Summary Value for Money Statement for the preferred option
Critical success criteria, weighted according to relative importance, were used to rank the
options.Details of the critical success criteria, weights and appraisals that they refer to are
outlined below.
Description of Critical Success Criteria
Weight(out
of five)
4
Relevant appraisal
Likelihood of success6–will the intervention demonstrate a
good likelihood of certainty about achieving its goals? Are
the incentives right and what is the management of
corruption risks?
4
Social
Conflict
Likelihood of impact - will the intervention deliver quality
services and choice, to the most excluded and vulnerable?
Does the intervention have robust M+E?
5
Social
Institutional
Low negative environmental impact
2
Climate & Environment
Value for Money – will the intervention be affordable to the
Ministry of Health and Population and demonstrate good
value in achieving cost effectiveness?
Economic
Assessment of Options using Critical Success Criteria
CSC
VFM
Weight
Option
1
Option
2
Public sector
provision
Non-state
sector
provision
Likelihood
of success
Likelihood
of impact
Envir
impact
Total
Ranking
4
4
5
2
-
-
3
3
2
5
44
2
4
4
4
5
62
1
The assessment of the options using critical success criteria indicates that Option 2,
delivering family planning services through non-state providers is the preferred option. In
order to address the last remaining pockets of unmet need for family planning, we need
more flexible and rapid measures and given the non-state sector’s ability to innovate, deliver
on time and certainty of services being delivered, this option makes sense. Not all non-state
providers are working in the districts with the lowest contraceptive prevalence rates (see
annex 3 for a map of the key service providers outlets) so we will be asking non-state
providers to work in districts that they are not currently operational. In the districts where
they are already working, until they get a public subsidy (from DFID for example) they are
not going to effectively serve the poorest and most excluded. So the resources that this
6
The economic appraisal has already discounted the results according to the likelihood of success
according to an institutional perspective – the ability for the public and non-state as institutions to be
able to deliver success. So this CSC focuses on incentives for vulnerable groups and corruption –
essentially the social and conflict appraisals.
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project will bring will ensure that the non state providers deliver services to a different target
group. DFID will need to pay particular attention to quality of care and equity in contracting
and monitoring the non state sector.
DFID is a key partner in the health sector and provides sector budget support and technical
assistance to help implement the Ministry of Health’s 5 year plan. This project would not be
part of the sector budget support arrangement and would be contracted directly by DFID and
therefore a close partnership with the Ministry of Health and Population will be critical. The
family planning service delivery and procurement activities will be evaluated at the end of
the 3 year period and in year 4, if the Ministry of Health and Population has demonstrated
that it has met the mutually agreed performance benchmarks, in areas such as managing
service contracts and regulating service providers; only then willthe successful family
planning activities be funded through the pooled fundof the SWAp and contracted by the
Ministry of Health and Population. A tentative timeline for the project activities are outlined in
Annex 2.
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Commercial Case
Direct procurement
A. Clearly state the procurement/commercial requirements for intervention
DFID Nepal has allocated up to £18 million for family planning services over a 4 year period.
£10 million will be spent within the current Operational Plan period (2012/13 – 2014/15) and
£8 million will be spent in financial years 2015/16 and 2016/17.
The Family Planning Service Provider will be selected through a competitive tender process,
limited to pre-qualified providers identified under DFID’s global Reproductive Health
Framework Agreement. DFID will also procure monitoring and evaluation (M&E) services
and the Service Provider will be selected through the full OJEU competitive tender
processunless DFID’s global Evaluation Framework Agreement is ready in time. Terms of
Reference for the Family Planning and M&E Service Providersare attached in annexes 10
and 11.
Direct procurement will be through a commercial contract with successful bidders. Two
contracts will be issued and both contracts will be for an initial period of 2 years, and
extended subject to satisfactory performance. The contract with the monitoring and
evaluation provider can be extended for up to an additional 1 year. The contract with the
family planning service provider can be extended for up to 2 additional years. DFID will use
the contract extension as an opportunity to review costs and scope for increasing VFM
through procurement.
In the third year of the project, the evaluation(s) will determine which family planning
activities have demonstrated impact and should be continued and those which need to be
phased out. At the same time, DFID will make an assessment of the ability of the Ministry of
Health and Population to manage service contracts and regulate private providers against
the mutually agreed benchmarks that will be established in the inception phase of the
project. If the benchmarks have been met then the successful family planning activities and
corresponding commodities will be channelled to the Ministry of Health and Population. If
however, the benchmarks have not been met, the contract with the family planning service
provider will be extended, subject to satisfactory performance,to ensure service continuity
and oversee in slower time the transition to the Ministry of Health and Population.
B. How does the intervention design use competition to drive commercial advantage
for DFID?
DFID’s expectations of the contract are set out in the expected results to be delivered by the
project (logical framework in annex 1) and the Terms of Reference for the Family Planning
and M&E Service Providers (annex 10+11). Output based contracts will be established and
DFID and the Service Providers will outline the outcome focused milestones for the contract
period.
DFID’s global Reproductive Health Framework Agreement includes pre-qualified providers
with existing experience in delivering family planning services at scale who have already
demonstrated capacity to innovate and deliver VFM. Competitive bidding among prequalified providers will drive down costs and is expected to deliver value for money.
The contract for the procurement of monitoring and evaluation services will be subject to full
OJEU competitive tender process or competition among pre-qualified providers as part of
DFID’s global Evaluation Framework Agreement. These services are highly specialised but
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DFID Nepal Family Planning Business Case
there are enough global providers to provide good competition also delivering value for
money.
C. How do we expect the market place will respond to this opportunity?
Seven bidders have been pre-qualified to participate in the global Reproductive Health
Framework Agreement. All are experienced suppliers covering a wide range of services
from family planning delivery and technical assistance to the procurement of reproductive
health commodities. Many of the suppliers have experience in South Asia and some in
Nepal. For the monitoring and evaluation services the range of experience suppliers will be
smaller and with less experience in Nepal but due to the nature of the project and its
innovative approach we expect a good interest.
D. What are the key cost elements that affect overall price?How is value added and
how will we measure and improve this?
The key cost elements are personnel (including technical assistance), clinic based and
outreach services, equipment and supplies and commodities. We expect these cost
elements to be higher than the regional average given the target population that this project
needs to reach and the difficult geographical terrain in which they are expected to operate.
Additionally, we expect the project to be procuring more expensive long term methods of
family planning and so the commodity costs are expected to be higher but are more cost
effective.
Value will be added and costs will be minimised by competitive tendering as outlined above.
In addition, DFID will monitor key cost inputs such as fee rates and commodity prices to
ensure we are purchasing at the regional market rate. Payments will be made in arrears and
invoices will be submitted to DFID for approval and payment, on achievement of agreed
milestone targets and satisfactory delivery of services. The project budget will be reviewed
annually alongside formal annual reviews to monitor progress, efficiency and identify cost
savings.
E. What is the intended Procurement Process to support contract award?
DFID Nepal will procure family planning services through a mini competitive tender process,
which will be limited to pre-qualified providers identified under the global DFID Reproductive
Health Framework Agreement. Pre-qualified providers will be invited to submit expressions
of interest and those that meet the essential selection criteria will be invited to submit a full
proposal and budget. The Ministry of Health and Population will be involved in evaluating the
bids and choosing a suitable implementing partner.
DFID Nepal will procure monitoring and evaluation services either through an international
competitive process subject to OJEU procedures or the global evaluation framework
agreement if it is ready in time. As above, those expressions of interest that meet the
selection criteria will be invited to submit a full proposal and budget. Key national
stakeholders, including the Ministry of Health and Population, will be involved in evaluating
the bids and choosing a suitable implementing partner.
F. How will contract & supplier performance be managed through the life of the
intervention?
DFID Nepal will closely monitor the progress of the programme. Financial performance will
be linked to achievement and progress on agreed milestones and outputs. DFID will:


Conduct an annual review of the project, covering the two contracts, including
assessment of family planning and monitoring and evaluation Service Providers
performance.
Track programme performance and budget execution through quarterly narrative and
financial reports and quarterly update meetings with both providers.
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DFID Nepal Family Planning Business Case




Ensure that the Service Providers have quality assurance procedures in place to ensure
goods and services are fit for purpose.
Agree and monitor a risk strategy, which sets out specific responsibilities of DFID and
the Service Providers for managing and mitigating risk.
The contract with the Service Providers will incorporate steps to be taken in the event of
poor performance and failure to deliver the expected results and value for money.
Performance will be considered at the 2-year stage at which contract renewal for a
further 1-2 years is considered.
Financial Case
A. What are the costs, how are they profiled and how will you ensure accurate
forecasting?
DFID Nepal has allocated £18 million over 4 years from 2012/13 to 2016/17 for the delivery
of reproductive health results. Approximately £15m will be to support the scale up of
services to vulnerable and excluded groups, including the procurement of commodities and
£1.5m for the monitoring and evaluation of service delivery and £1m for technical assistance
needs. This approach to reaching vulnerable and excluded women is extremely innovative
and there is very little international evidence. It is anticipated that significant results will be
demonstrated and robust monitoring and evaluation will ensure that these results are
captured and used by key stakeholders, presented regionally and internationally.
The anticipated annual spend profile is as follows:
2012/13 - £300,000
2013/14 - £4.7million
2014/15 - £5million
2015/16 – £4 million
2016/17 - £4 million
Service Providers will submit a budget and cost breakdown as part of their commercial
proposals during the tendering process. A finalised budget will be negotiated with the
contracted Service Providers. The contracts will be output based and milestones which
determine the deliverables and the spending will be agreed annually and reviewed every
quarter.
B. How will it be funded: capital/programme/admin?
The project will be fully funded fromrecurrent programme costs.
C. How will funds be paid out?
Contracts will be signed between DFID and each of the selected Service Providers.
Payments will be made in arrears and invoices will be submitted to DFID for approval and
payment, on achievement of agreed milestone targets and satisfactory delivery of services.
Some of the milestone targets will be performance based and linked to the key performance
indicators in the logframe.
D. What is the assessment of financial risk and fraud?
The appraisal and the selection of the options have been guided by DFID Nepal’s new AntiCorruption and Counter Fraud strategy. The assessment of financial risk and fraud is low.
Both contracts will be awarded through a competitive process and those organisations
already listed under the Reproductive Health Framework Agreement are pre-qualified and
have a demonstrated track record, including in the procurement of commodities. We will
ensure robust accounts monitoring and reporting mechanisms and as outlined above we will
agree and monitor a risk strategy, which will include fraud and fiduciary risk.
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DFID Nepal Family Planning Business Case
E. How will expenditure be monitored, reported, and accounted for?
DFID and the Service Providers will agree an annual work plan with key milestones and
performance indicators in line with the log frame and an annual budget. The Service
Providers will submit quarterly progress and financial reports and provide monthly updates
of financial forecasts.
The Service Providers will maintain and update an assets register which are subject to
annual spot checks and will be disposed of as per DFID procedures at the end of the
project. DFID will have the right to conduct external audits. As outlined above, the contracts
will incorporate steps to be taken in the event of poor performance and failure to deliver
results and value for money.
Management Case
A. What are the Management Arrangements for implementing the intervention?
Oversight
DFID Nepal will manage the family planning project. The UK HCS health adviser will be
responsible for overall technical oversight and the Programme Manager will be responsible
for the overall management of the project. The Family Health Division and the Logistics
Management Division of the Department of Health Services will be involved in the oversight
of the project’s components that have direct relevance. For example, Family Health Division
will provide oversight of the family planning service delivery activities any technical
assistance provided to build service contract capability. Logistics Management Division will
provide oversight of the activities related to sub-contracting of the supply chain management
of reproductive health commodities in a selection of districts and any technical assistance
provided to improve the forecasting and procurement of reproductive health commodities.
DFID and the Service Providers will also be expected to participate, when required, in the
Family Planning Sub-Committee of Family Health Division and any relevant Committees in
Logistic Management Division to provide progress reports, service delivery results and
lessons learnt.
Management
The family planning and monitoring and evaluation Service Providers will be responsible for
the delivery of respective project components and its outputs. As well as maintaining good
relationships with Ministry of Health and Population counterparts as outlined above, the
implementing partners are expected to develop good working relationships with key donors
and their contracted supplies working the reproductive health. A key donor partner will be
USAID.
The Service Providers will be expected to carry out consultations with key stakeholders, in
particular Government and Ministry of Health and Population stakeholders, in any given
district in which they expect to implementactivities. This would include the district health and
public health officer(s), health facility managers, private providers, local government officials
and I/NGOs, CBOs and vulnerable and excluded women and adolescent girls, who are key
beneficiaries in this project.
Quarterly reports outlining progress and achievement of targets produced by the Service
Providers will be presented on a quarterly basis to a common governance mechanism.
During the inception phase the implementing partners will plan an exit strategy to work
towards transition of the services to the Ministry of Health and Population which will include
plans and milestones for service delivery contracting and regulating non-state providers of
family planning services.
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DFID Nepal Family Planning Business Case
B. What are the risks and how these will be managed?
This is a low risk project as family planning is not considered a contentious intervention in
Nepal. The failure to achieve the expected outputs is considered to be low. The risks will be
continually monitored during implementation but at this stage the main risks are:
Risk
Impact
Likelihood
Mitigation
Project fails to address
persistent unmet need
(vulnerable and excluded)
High
Medium
Complex service delivery pilots
means that results are difficult
to demonstrate
Medium
Low
Weak supply chain and
mismatch between commodities
procured and demand
Medium
Medium
Differences between the public
and non-state sector are too
great to achieve a
complementary system
Medium
Low
Shortage of skilled and trained
health workers willing to work in
remote areas
Medium
Low
The country will transit to a
federal structure sometime in
the near future and if this
structure is defined by ethnicity,
as certain stakeholders are
proposing, then population size
and growth, could emerge as a
political issue.
High
Low
- Intervention will be implemented in
areas where the largest excluded and
vulnerable women live.
- Services will be provided free of
charge, according to Government
policy.
- A separate budget for M+E has been
allocated and it will be contracted
separately
- Data will be collected in intervention
and control sites and at baseline and
end line.
-USAID is considering further support
to reproductive health commodity
forecasting. If this does not materialise
this project will provide additional
technical assistance in this area.
- DFID already provides technical
assistance to the SWAp to reduce
corruption risks in procurement, this will
continue through the life of this project
- An activity to be piloted as part of this
project will be the contracting out of the
supply chain management which if
successful may provide an alternative
model to Government.
-Non-state sector providers are well
established and can demonstrate
sound track record of delivery. Strong
M+E of the intervention including
demonstrating VFM will be embedded.
- The intervention will be delivered in
close cooperation with Government,
including building the capacity of the
Ministry of Health and Population to
manage service contracts to enable
them to manage non-stateproviders in
future years.
- Contracts will be given to non-state
sector providers to allow them to
charge a competitive rate to attract and
retain health workers.
- Ensure that the messaging of the
intervention is about informed choice
for those women with little access.
- Ensure that the project is working
closely with the DFID/GIZ Risk
Management Office if this risk arises.
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DFID Nepal Family Planning Business Case
C. What conditions apply(for financial aid only)?
The family planning service delivery and procurement activities will be evaluated at the end
of the 3 year period and in year 4, if the Ministry of Health and Population has demonstrated
that is can manage service contracts and regulate service providers; the successful family
planning activities will be funded through the pooled fund and contracted by the Ministry of
Health and Population. DFID has been providing financial aid to the health sector since 2005
and it is governed by a continual assessment of the Government of Nepal’s commitment to
the following partnership principles:




Poverty reduction and the Millennium Development Goals
Respecting human rights and other international obligations
Improving public financial management, promoting good governance and
transparency and fighting corruption
Strengthening domestic accountability.
The Ministry of Health and Population and the major health sector donors have also signed
a joint financing arrangement which outlines in more details the partnership principles that
are specific to the sector and outlines actions that would be taken if either partners were to
deviate from these principles.
D. How will progress and results be monitored, measured and evaluated?
Given that the evidence for non-state partners delivering family planning services to the
most vulnerable and excluded women is medium to limited, alongside the contract for
delivering services this project will have a contract to manage a series of evaluations of the
activities and provide support to the family planning service provider in ensuring robust
monitoring arrangements.
The M+E system will include data from a combination of Government data sources and
project specific service monitoring, research and surveys and will including the following
components:
(i) Routine project monitoring and verification. Tracking of indicators set out in the project
logframe supported by the theory of change. Full details will be completed during the
inception phase following selection of the family planning and monitoring and evaluation
service providers and baseline survey. The service providers will provide quarterly and
annual narrative and financial reports, measuring progress against logframe indicators.
Annual reviews will be conducted according to DFID procedures.
Monitoring systems will be designed to ensure that the project can measure age, income
quintile, caste and ethnic group, place of residence in new users. It will also need to capture
changes in family planning methods provided and quality of care.
(ii) Evaluation. Different designs will be employed to capture the different approaches to
service delivery. The evaluations will be conducted by the 3rd year and successful
approaches will be taken to scale through the Ministry of Health and Population. An impact
evaluation of some of the more critical clinic or outreach approaches will be explored by
randomly allocating clinics to receive the new activities. Theevaluation design and questions
will be determined with the independent M+E service provider during the inception phase.
Quest number of logframe for this intervention: 3585848
References
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DFID Nepal Family Planning Business Case
i DFID (2010) ‘Improving Reproductive, Maternal and Newborn Health: Reducing Unintended Pregnancies.
Evidence Overview’
iiRutstein S. (2005) Effects of preceding birth intervals on neonatal, infant and under-five years mortality and
nutritional status in developing countries: evidence from the demographic and health surveys. Int J Obstetrics
Gynaecology. 89 (suppl 1): S7–S24
iii DFID (2010) ‘Improving Reproductive, Maternal and Newborn Health: Reducing Unintended Pregnancies.
Evidence Overview’
iv Cleland et al (2006) ‘Family Planning the Unfinished Agenda’ Lancet vol 368 p1810-27
v Singh et al. (2009) Adding it up: the costs and benefits of investing in sexual and reproductive healthcare.
Guttamacher Institute
viWHO et al (2012) Trends in maternal mortality: 1990 to 2010. WHO, UNICEF, UNFPA and The World Bank
estimates
vii Ministry of Health and Population, New Era, Macro International, USAID (2011) ‘Nepal Demographic and
Health Survey: Preliminary Report’
viii Ibid
ix Singh et al (2009) ‘Adding it Up: The Costs and Benefits of Investing in Family Planning’ Guttmacher Institute
x Ministry of Health and Population, New Era, Macro International, USAID (2011) ‘Nepal Demographic and
Health Survey: Preliminary Report’
xi Ibid
xii Ministry of Health and Population (2011) Health Management Information System
xiii Ministry of Health and Population, New Era, Macro International, USAID (2006) ‘Nepal Demographic and
Health Survey’
xiv Ministry of Health and Population, New Era, Macro International, USAID (2011) ‘Nepal Demographic and
Health Survey: Preliminary Report’
xvIbid
xvi Aryal, RH, Pathak, RS, Dottel, BR and Pant, PD. (2008) ‘A Comparative Analysis of Unmet Need in Nepal:
Further Analysis of the 2006 Nepal Demographic and Health Survey. Calverton, Maryland, USA: Macro
International Inc
xvii Ministry of Health and Population, New Era, Macro International, USAID (2011) ‘Nepal Demographic and
Health Survey: Preliminary Report’
xviii Ministry of Health and Population, New Era, Macro International, USAID (2006) ‘Nepal Demographic and
Health Survey’
xix Ministry of Health and Population (2010) ‘Nepal Health Sector Plan II’
xx Sharma G. (2011) ‘Family Planning: internal report for DFID’
xxi Ministry of Health and Population, New Era, Macro International, USAID (2006) ‘Nepal Demographic and
Health Survey’
xxii Ministry of Health and Population, New Era, Macro International, USAID (2011) ‘Nepal Demographic and
Health Survey: Preliminary Report’
xxiii Thapa S., Neupane S. (2011) ‘Abortion Clients in Public and Private Sector Clinics in Nepal’ IPAS, Valley
Research Group.
xxiv USAID Deliver Project (2010) Contraceptive Security Indicators Data base
xxv Sharma G. (2011) ‘Family Planning: internal report for DFID’
xxvi Ministry of Health and Population, New Era, Macro International, USAID (2006) ‘Nepal Demographic and
Health Survey’
xxvii Sharma G. (2011) ‘Family Planning: internal report for DFID’
xxviii Walford V. (2009) How should DFID work with non-state actors to deliver health outcomes for poor people?
Internal DFID paper.
xxix Reproductive Health Supplies Coalition Nepal Country Profile Downloaded 03/12/11
http://www.rhsupplies.org/resources-tools/country-profiles/nepal/nepal.html
xxx Cleland et al. (2012) ‘Contraception and Health’ Lancet – to be published in July 2012
xxxi Rahman et al. (2001) ‘Do better family planning services reduce abortion in Bangladesh?’ Lancet 358:105156
xxxii Marston et al (2003) ‘Relationships between contraception and abortion: a review of the evidence’
International Family Planning Perspectives 29(1): 6-13
xxxiii Singh et al (2009) ‘Abortion Worldwide: A decade of Uneven Progress’ Guttmacher Institute
xxxiv Cleland et al (2008) ‘Family Planning the unfinished agenda’ Lancet
xxxv Blacker et al (2005) ‘Fertility in Kenya and Uganda: a comparative study of trends and determinants’
Population Studies 59(3): 355-373
xxxvi Westoff et al (2001) The Contraception – Fertility Link in Sub-Saharan Africa and in Other Developing
Countries. DHS Analytical Studies No. 4. Calverton, Maryland: ORC Macro.
xxxvii Conde-Agudelo et al (2006) Birth spacing and risk of adverse perinatal outcomes: a meta-analysis JAMA.
295(15):1809-23.
xxxviii Zhu BP (2005) Effect of interpregnancy interval on birth outcomes: findings from three recent US studies’
International Journal Gynaecol Obstet Suppl 1:S25-33.
xxxix Stover et al (2009). How Increased Contraceptive Use has Reduced Maternal Mortality.Maternal and Child
Health Journal, 14, 5: 687-695.
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DFID Nepal Family Planning Business Case
Do et al (2012) ‘Women’s empowerment and choice of contraceptive methods in selected African
countries’ Int Perspectives in Sexual and Reproductive Health. Vol 38 nos 1
xl
xli Ross et al (2011) ‘Trends in national family planning programmes, 1999, 2004, 2009’ International
Perspectives on SRH’ 37(3):124-133
xlii Pritchett, L. (1994) Desired Fertility and the Impact of Population Policies. Popul Dev Rev. 20 (1): 1–55.
xliii Depuur C, et al (2002) The impact of the Navrongo Project on contraceptive knowledge and use,
reproductive preferences and fertility. Stud Fam Plann 33 (2): 141–146
xliv Stoebenou K et al (2003) A case study from Highland Madagascar. International Family Planning
Perspectives. 29 4: 167–173.
xlv Chege J et al (1987) An assessment of community based family planning programmes in Kenya. Population
Council
xlviKoehlmoos TP et al (2009) The effects of social franchising on access to and quality of health services in low
and middle income countries. Cochrane Databse Syst Rev.
xlvii Madhavan S, et al (2010) Private Sector Engagement in Sexual and Reproductive Health and Maternal and
Neonatal Health: A Review of the Evidence. Johns Hopkins University, 2010.
xlviii Chapman S, et al (nd) Review of DFID approach to social marketing. Annex 5: Effectiveness, efficiency and
equity of social marketing and Appendix to Annex 5: The social marketing evidence Base. DFID Health Systems
Resource Centre. London, UK; 2003
xlixBennett et al (2008) Caste, Ethnic and Regional Identity in Nepal: Further Analysis of the 2006 Nepal
Demographic and Health Survey. Macro International Inc.
l Ministry of Health and Population (2012) ‘Human Resources for Health Strategic Plan 2011-15”
li Ministry of Health and Population (2010) ‘Nepal Health Sector Programme 2 – Implementation Plan’
lii World Bank (2011) ‘Assessing Fiscal Space in Nepal’
liii Ibid
liv Ministry of Health and Population (2010) ‘Nepal Health Sector Programme 2 – Implementation Plan’
lv Sharma G. (2011) ‘Family Planning: internal report for DFID’
lvi Ministry of Health and Population (2011) ‘Service Tracking Survey’
lvii Ministry of Health and Population, New Era, Macro International, USAID (2011) ‘Nepal Demographic and
Health Survey’
lviiiIbid
lixIbid
lx Ibid
lxi Ibid
lxii Ministry of Health and Population, New Era, Macro International, USAID (2011) ‘Nepal Demographic and
Health Survey’
31 | P a g e