Contraception costs

By Eric Crampton 06/02/2013 16


Berk Ozler asks whether the government should provide free emergency contraception for young girls. It’s an interesting question, especially as the Taranaki District Health Board recently announced plans for free EC provision.* Berk summarises the existing literature pretty comprehensively.

But I’ll quibble a bit with his policy conclusion, at risk of channeling Steven Landsburg.

Berk and I agree entirely on his first conclusion: the morning after pill should be easily available without a prescription. It’s safe, accidents (or worse) happen, and the barrier of going through a doctor can be non-trivial.

He then asks if it should be subsidised. Berk writes:

That question is more difficult. It depends on the future costs of teen pregnancy (and abortions) – both to the individual and to society. If children from single parent families, poorer families, etc. are more likely to need EC but less likely to be able to afford it, it may make sense for the government to subsidize the cost. Even if the costs are solely to the future adult herself and not to the society in general, they can be justified under the principle of ‘second chances’ – after all we’re talking about children and young people here. If there are positive externalities, the argument for subsidies is even simpler. So, I’ll return to the issue of subsidies after reviewing the literature on the individual consequences and public health externalities of making EC freely available to young people.

Berk’s summary of the relevant literature:

  • “There is some reason to worry about children’s outcomes in teen pregnancies” 
    • increased risk of poor natal outcomes
  • “The evidence on the effects of teen pregnancies on future outcomes of the mother are mixed. There is not enough here to justify a strong stance for a policy decision.” 
    • Most of the effects you see in the cross section are due to that women having children in their teens tend to be different from those who decide to wait until they are older, and would have different outcomes even if they had not had children while young. 
  • There is little evidence that use of the morning after pill has any effect on teen pregnancy rates, abortion rates, or STD rates, though it does somewhat reduce condom use.
    • Berk here highlights that failure to use the emergency contraception even where provided may be a problem, perhaps due to “a failure to recognize (or acknowledge) a risk of conception on part of the prospective users.” He writes:

      “In a survey of thousands of teenage mothers who had unintended pregnancies, about a third who didn’t use birth control said the reason was they didn’t believe they could get pregnant. Why they thought that isn’t clear.” The evidence is suggesting that (a) unprotected sexual activity is high among people who don’t report not wanting to have children; and (b) they don’t use the free EC that is in their drawer and can be used for up to 5 days after the unprotected sexual activity or a contraceptive incident. You can take a horse to the water, but you cannot make him drink… 

He concludes that though the public health effects may be negligible, emergency contraception should be available for young people and, ideally, free if we can afford it.

Ozler notes that the morning after pill costs $40 USD and that there’s some evidence that teens substitute to its use from condoms (which are rather cheaper). If there’s little evidence of other policy-relevant benefits from widespread subsidised EC availability, then I’m having an awfully hard time seeing why the government should stump up $40 per dose.** The NZ Family Planning website sells condoms for about $1.50 each.

I’m also pretty sure that  the government provides subsidised access to condoms via a doctor’s prescription.

Steven Landsburgh controversially wondered last year why he should be paying for other peoples’ birth control. I can see some decent second-best arguments for that the government subsidise birth control, not least of which is that it may partially offset the incentives created by governments’ commitments to support children borne by those who cannot afford to raise them. The elasticity of birth rates among the improvident to subsidised childbearing may be rather larger than the elasticity with respect to the financial cost of contraception, but the former isn’t much on the table aside from DPB work requirements. Whatever the second-best arguments for subsidised contraception, I have a hard time seeing the case for a general subsidy for a relatively expensive method of contraception.

* This follows on from a similar trial at the Auckland DHB. One of my projects for the coming semester is to get data from sexual health clinics on STD rates to see whether the Auckland trial had any effect on STDs. We’d started getting things lined up to get that data in the spring*** of 2010, and then the earthquakes put it rather far onto the backburner.

** If you want to subsidise the morning after pill for women seeing a doctor after sexual assault, I’m on your side. That’s different from giving it for free to everybody.

*** Wow, North American habits die hard. First draft said fall. But it was August/September. And that’s spring here.


16 Responses to “Contraception costs”

  • If you want to subsidise the morning after pill for women seeing a doctor after sexual assault…

    Why do they need to see a doctor? I thought you supported prescriptionless access?

    I’m also curious as to why it’s so expensive compared to the standard oral contraceptive pill, given that my understanding is that it’s the same actual pills, just taken in a different way. You could get a lot of emergency contraception doses out of a 6-month supply of standard pills, which costs maybe $5.

    Finally, you’re looking at whether emergency contraception gets substituted for condom use, but it’s different people making those decisions – condom use depends on the guy’s agreement, whereas emergency contraception is the woman’s decision. Whatever model you use needs to recognise that. One argument for heavily subsidising all sorts of reproductive health initiatives is that while men and women both benefit from sex without the risk of conception, women pick up more of the costs of it, both in financial and physical health terms.

    • I do support prescriptionless access; I’m not so sure about getting it with subsidy without prescription.

      I have absolutely no clue what’s going on with the pricing; I’m not in that market. If there’s a cheap enough generic, then I worry less about substitution from condoms to pills.

      Modelling the contraception decision could be interesting… I can imagine cases though where free access to the morning after pill makes women who prefer condoms worse off – there’s no longer a simple threat point of “if you don’t wear one, I could get pregnant, and you’d have to pay child support, so please put one on.”

  • Steven Landsburgh controversially wondered last year why he should be paying for other peoples’ birth control.

    Its a hell of a lot cheaper than paying Working for Families tax breaks and Education costs if you don’t.

  • I’m not so sure about getting it with subsidy without prescription.

    It’s a bit pointless subsidising a drug when a doctor’s appointment to obtain the prescription for it costs $50 plus.

  • You can’t get your own Community Services Card until you’re over 18, unless you’re working and supporting yourself or doing full time tertiary study. Card eligibility is based on family income, not what funds a young person has independent access to. And again, if you’re in your 20s and have a job that disqualifies you for the community services card, there’s not a lot of difference between a US$40 (? why don’t we know the NZ$) pill and a doctor’s appt and a free one.

    But the main problem with doctor’s appts being a factor is the hassle of arranging it within the 72 or so hours the emergency contraceptive is effective. A three day wait for an appointment is not uncommon in my experience, and a non-trivial proportion of emergency contraceptive use would be in holiday destinations around statutory holidays, where it’s even harder to get a doctor.

    I’d have thought some basic knowledge about the options and costs available to young people would be useful if you’re going to speak from a sciency perspective about policy that affects them.

  • 1. I know that you can’t get a CSC except under particular circumstances if you’re under 18. Hit the comments discussion over at Offsetting Behaviour, where Berk and I hash things out. http://www.offsettingbehaviour.blogspot.co.nz/2013/02/contraception-costs.html

    2. The NZ cost seems to be about the same if you get it at pharmacies, but cheaper at family planning clinics. At least according to some Google searches.

    3. The costs and options are endogenous to the discussion here, not exogenous. If we make emergency contraception free because we don’t want to make things too much of a hassle for a 15 year old girl whose boyfriend’s condom broke, we have to weigh up how many people then shift from using very cheap condoms to using relatively expensive (but free to them) EC instead of condoms. If EC can be much cheaper if it’s provided on the shelf at the pharmacy rather than with more expensive pharmacist intervention, that also would change things.

    3. Agree completely that the time cost of a doctor’s visit for a free prescription should make working people lean towards just paying the $40. That’s a feature, not a bug. People who don’t need the subsidy shouldn’t get it.

    4. The most important bit from Berk’s summary to remember is that the public health benefits from having free morning after pill are really really small. Little evidence of reductions in teen pregnancy, abortions; little evidence of bad effects either other than substitution away from condoms and towards EC. If the benefits are very small in the aggregate, the cost could easily be pretty big in the aggregate – especially if some young women then shift away from condoms and towards relying on EC. People can draw different conclusions from that – Berk still favours blanket free provision. I favour allowing easy access without prescription, but I’m not sure that the case has been for a general policy of completely subsidised provision.

  • But you argue for subsidised ECE for victims of sexual assault (presumably because their behaviour cannot have been influenced by economic incentives) – how is that useful when it costs about the same as unsubsidised over the counter ECE?

  • Because I, perhaps wrongly, expected that a reasonable proportion of victims of sexual assault would already be at the doctor’s office for associated injuries, for STD testing, for counselling, or for evidence-gathering.

  • Maybe 15%, if reporting to the police is comparable.

    It would be stupid if it didn’t already form part of standard care for sexual assault victims seeking medical treatment (the TV series Treme has a chilling scene showing the cocktail of drugs one character was given), but an inefficient way to deliver it to the majority of sexual assault victims.

    It seems to me to be far more sensible to subsidise it for everyone at a level that’s affordable but slightly more than more effective forms of contraception – easier to administer, fewer costs for unnecessary medical consultation, and perhaps an effect on abortion and unwanted pregnancy rates.

  • I can imagine there being levels of partial subsidy that could dominate either no subsidy or full subsidisation; a lot hinges on unknown elasticities of substitution across birth control methods, and on whether the “it really doesn’t do much” results Berk reports would apply here in NZ as well.

  • You do not mention the side effects of usage. My understanding is the EC makes you feel horrid for a day or two, with nausea and headaches. Surely this would bias women towards condoms instead of EC usage.
    Your argument against making EC free, is that then they are cheaper than condoms. Two possible fixes for that : make them the same price as condoms; make condoms free as well.
    I personally think they should be freely available, because I’d rather women who do not want children can use an EC, rather than weighing up whether to spend $50 (which they may not have), versus hoping that they will not get pregnant.

  • Check Berk’s summary of the research. Again:
    1. There’s some evidence women reduce condom use when EC is available; this is a total effect that would have to take into account the unpleasantness of using EC.
    2. There’s little evidence that EC improves any aggregate outcomes that we might want to target through its use, though there’s also little evidence of harm (so if the government could get it for free, they could give it away for free too).
    3. Freely provided EC often isn’t used anyway – either the girls self-deceive into thinking they won’t get pregnant, or aren’t really opposed to becoming pregnant.

  • 95% of the time, you don’t get pregnant from unprotected sex. People are bad at gauging small risks, especially when they’re young, and emergency contraception is poorly understood – people equate it with medical abortion, or think it stops a fertilised egg from implanting (it works by preventing ovulation). It’s hard to be a rational utility maximiser in those circumstances.

    • And still, there’s plenty of evidence consistent with that even youths rationally weigh up costs and benefits at the margin. Parental abortion notification laws reduce STD rates, presumably because kids weigh up the costs of having to front to mom and dad in case of pregnancy and so then use protection. Mexican prostitutes charge premiums for no-condom sex that are entirely consistent with the risk of getting STDs and standard estimates of the value of statistical lives. Promiscuity seems sensitive to competition in dating markets and gender ratios entirely in line with predictions from a pure rational expectations model.

      And there’s this: http://offsettingbehaviour.blogspot.co.nz/2010/01/how-economists-deal-with-premarital-sex.html

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