_Private Sector Approaches to Effective Fandly Planning_ _38_ L class consumers may prefer the lower-priced CSM brand. The<sup>incentive to retailers is to sell the</sup> higher-priced items. As a result, companies may be tempted to<sup>raise prices rather than developing</sup> product line extensions for more affluent customers, once donor subsidies<sup>have been withdrawn. If</sup> the project has successfully established a viable low-income market<sup>and positioned products for that</sup> market, commercial firms should more than make up in volume<sup>what they lose in profit margins.</sup> It remains to be seen if they will in fact do so.

# 5.4. Impact of increasing managed medical care participation

Recent experience has shown that even in times of economic crisis, there are<sup>private</sup> employers and health underwrite.s who can achieve significant<sup>cost savings with family planning.</sup> Urban employers must be convinced that their workers need family planning assistance.

For the short and medium term, increased participation of insurance<sup>companies and</sup> managed medical care in family planning is more likely to affect market<sup>segmentation than to lead</sup> to market expansion. Outside of Latin America, the vast majority<sup>of the population is either outside</sup> the formal labor force or not covered by employer-sponsored medical<sup>benefits, and those who are</sup> covered are also more likely to already be using contraception.

This is not to suggest that donors not work with this sector, but quite the contrary. Providing technical assistance to employer plans is a relatively low-cost<sup>activity, and if direct</sup> subsidies are not provided, whatever family planning activities that<sup>are begun, are likely to continue</sup> without donor support. Implementing family planning in this context is time-consuming<sup>ar` Nuires</sup> continuous one-on-one contact and follow-up with both top and middle management.<sup>It may take one</sup> or two years between presentation of cost-benefit analyses and initiation<sup>of services. Furthermore,</sup> it should be kept in mind that employers and health underwriters<sup>are, not in the family planning</sup> business. No matter what the company's concern with employee<sup>welfare, family planning will</sup> always be a low priority.

The impact of providing subsidies to companies unwilling or unable<sup>to make the initial</sup> family planning investment is still not clear. The limit or upper bound to this activity<sup>is the size of</sup> the formal labor force; the viability of the approach depends on reducing costs and/or<sup>attracting hard-</sup> to-reach audiences, such as young men.

## 5.5. Impact of public-private partnerships and privatization

The impact of public-private partnerships on contraceptive use<sup>is difficult to assess,</sup> principally for lack of data. Prevalence surveys routinely ask users for their family<sup>planning outlets</sup> but seldom ask about source of financing. Consequently, clients<sup>tend to be classified by the</sup><sup>_location_</sup> of their provider rather than by who actually paid the bill. This<sup>may lead</sup><sup>**to**overestimating either</sup> the impact of the private sector, in the case of public subsidies paid to private practitioners<sup>operating</sup> out of private facilities, or overestimating the impact of<sup>the public sector, in the case of private</sup> practitioners operating out of public facilities.

NGOs operating special family planning sessions in government facilities<sup>have</sup> significantly increased program coverage in Honduras and Peru (Honduran<sup>Ministry of Public Health</sup> 1989; Solari et al. 1989). In an operations research project in Indonesia,<sup>government fieldworkers</sup> referred clients to private midwives for clinical methods.<sup>Although 29 percent of the fieldworkers</sup> reported referring clients to private providers, only 3 percent<sup>of the providers' clients reported having</sup>