As countries try to allocate limited public sector funds for family planning effectively and efficiently, there is increasing interest in understanding and measuring clients’ ability to pay for
services. If public funds are not sufficient to serve the entire population, they should be targeted to users who are less able to pay. Ideally, women with some ability to pay for health care services should use the private sector, at least for less costly contraceptive methods.
This paper presents a methodology for describing the extent to which government subsidies are efficiently applied, that is, to users who could not otherwise afford their contraceptive methods. It examines national family planning markets that include both government and commercial providers and in which government resources are not sufficient to provide universal family planning coverage. Using Demographic and Health Surveys (DHS) data from 11 countries, the analysis shows that the commercial sector market share is higher for less expensive contraceptive methods and that women who make use of private sector maternal and child health care services are more likely to use commercial outlets for contraception. Distortions in this general pattern emerge in countries that over-subsidize certain contraceptive methods, particularly oral contraceptives, to the detriment of the commercial sector. Findings from this analysis can provide insights for further exploration of potential problems such as untargeted government subsidies for less expensive methods or lack of access for clinical methods.