The Utkrisht Development Impact Bond helps small private health facilities in Rajasthan improve their quality of maternal and neonatal care.
The field implementation of the Utkrisht Development Impact Bond began in Rajasthan’s small health care facilities, where women were able to receive care as per defined quality standards and protocols. (Photograph courtesy Utkrisht Project, Palladium)
There has been a significant reduction in maternal and newborn mortality rates in India over the past several decades. However, more remains to be done. In addition, there has been a major shift from home births to hospital births, with a significant portion of these births taking place at private health facilities. But efforts to improve the quality of health care services have been largely focused on government hospitals.
An initiative backed by the U.S. Agency for International Development (USAID) and international partners aimed to reduce maternal and newborn deaths by improving the quality of care at small private health facilities. Named Utkrisht Development Impact Bond, it is the world’s first maternal and newborn health impact bond. The word “Utkrisht” means excellence in Hindi. Development impact bonds finance development programs with funds from private investors who earn a return if the program is successful, paid by a third-party.
Private clinics and hospitals are used for 25 percent of all institutional deliveries and more than half of Caesarean births in Rajasthan. The small facilities were ideal for the quality improvement intervention as they did not have a dedicated quality accreditation program. Rajasthan also had “a higher maternal mortality ratio of 199 per 100,000 live births average, against the Indian national average of 130, per the Sample Registration Survey of Government of India (2014-16),” says Gautam Chakraborty, senior health financing advisor at USAID/India.
The Utkrisht Development Impact Bond’s field implementation began in Rajasthan in May 2018. It supported small health care facilities in achieving and sustaining a standard of quality defined by the government to decrease maternal and newborn mortality. Palladium, an international advisory and management company, was the implementation manager for this initiative and also designed the impact bond. UBS Optimus Foundation, the upfront funder, provided the initial working capital to the service providers, Population Services International (PSI) and Hindustan Latex Family Planning Promotion Trust (HLFPPT). According to the program, USAID and MSD for Mothers would pay back the investors the original amount invested if the predetermined targets are met. The development impact bond was designed to complement existing government initiatives, with the Government of Rajasthan acting in an oversight role.
The success of the development impact bond depended on whether the health care facilities were able to obtain the quality certifications set by the National Accreditation Board of Hospitals and Healthcare Providers (NABH), which takes care of hospital systems and patient safety standards, and the Manyata certification awarded by the Federation of Obstetric and Gynecological Societies of India (FOGSI).
Although USAID has earlier worked on quality certification of hospitals, Utkrisht was different in design. “USAID paid the risk investor, UBS Optimus Foundation, only if the outcome, meaning a hospital is ready for the NABH and Manyata certificate, is verified by the third-party agency Mathematica. It was conditional,” says Chakraborty.
The value of the impact bond was set at a maximum of $8 million with the per unit bond value being $18,000 per hospital.
The program helped private maternity hospitals get ready for the dual quality certification through a series of trainings for hospital staff, working to redesign the hospital layout, and putting in place standard operating procedures for different hospital processes.
Hospital staff sterilizing items following standard processes displayed at the work station. More than 6,000 doctors, nurses and other staff were trained in NABH and Manyata standards under the program. (Photograph courtesy Utkrisht Project, Palladium)
Impact of the program
“Never before have so many small hospitals made successful journeys to quality accreditation in such a short time, in spite of such unprecedented odds created by the Covid-19 pandemic,” says Chakraborty. “In the process, they helped ensure reasonable returns for private investment in a risky development agenda.”
By June 2021, the implementing partners, HLFPPT, PSI and Palladium had exceeded their targets by 12 percent at a cost less than anticipated, supporting 405 hospitals and getting them ready for the dual quality certifications as well as improving care for 450,000 mothers and newborns. More than 6,000 doctors, nurses and other staff have been trained in NABH and Manyata standards. Following this successful result, the donor organizations, USAID and MSD for Mothers, repaid the UBS Optimus Foundation, creating an 8 percent return for the investor.
The model proved to be financially viable for the private investor, cost-efficient for the funder, and most importantly, impactful for the final beneficiaries—mothers and newborns in Rajasthan.
UBS Optimus Foundation has engaged Catalyst Management Services, a Bengaluru-based entity, to evaluate the post project impact on the market and the hospitals supported under Utkrisht.
“The Development Impact Bond mechanism has proven its worth with successful implementation of the Utkrisht impact bond,” Dr. Tarun Chaudhary, project director (maternal health), National Health Mission, Department of Health and Family Welfare, Government of Rajasthan, emphasizes. “This model has been able to bring the quality aspects into the center of health care service delivery. Such innovative blended finance mechanisms can be further explored in addressing other crucial health issues.”
Ranjita Biswas is a Kolkata-based journalist. She also translates fiction and writes short stories.