USAID and its partner organizations implemented the development impact Utkrisht bond in February 2018. Many believe this is an innovative and cost-effective solution to end preventable maternal and child deaths in India.
The Utkrisht bond is targeted to assist the State of Rajasthan, where 80,000 babies die annually from inadequate medical care. But proponents hope the model can be used throughout India, which accounts for 20 percent of maternal and child deaths globally.
The development impact bond was announced in November of 2017 by USAID Administrator Mark Green at the Global Entrepreneurship Summit in India. It is expected to provide 600,000 women with improved healthcare access and potentially save 10,000 moms and newborns.
The bond works as a public-private partnership. Investors grant providers of maternal care with upfront capital. Then, outcome funders pay back the investors their principal plus a return if pre-agreed metrics are achieved. The investor, in this case, is the UBS Optimus Foundation, which has committed about $3 million. The organization works with philanthropists to bring sustainable benefits to vulnerable children.
Up to 440 private health facilities will then be operated with assistance from Population Services International (PSI) and the Hindustan Latex Family Planning Promotion Trust (HLFPPT), which also are co-investors providing 20 percent of the required capital. PSI is a global health nonprofit and the HLFPPT is an Indian nonprofit that works with maternal care.
In order to maximize success, private facilities are the focus of the Utkrisht bond. They host more than 25 percent of institutional deliveries in Rajasthan and are used by women of all socioeconomic backgrounds, yet little has been done to improve their quality of care.
USAID and Merck for Mothers, a nonprofit with the goal to end maternal mortality, have each committed up to $4.5 million that will be paid if the heath facilities meet accreditation standards. This is a highly cost-effective method to save lives according to World Health Organization standards, which is particularly exciting to USAID.
“The pay for success approach ensures appropriate stewardship of U.S. taxpayer dollars, while unlocking both private capital and government resources for health,” USAID states.
While this is the first development impact bond targeted toward health, the future of the Utkrisht bond looks promising. If it is successful, more initiatives can be implemented that involve private-public cooperation and effective use of taxpayer money to save the lives of many women and children around the world.
– Sean Newhouse