Cost Sharing Options for Health Services in Tanzania

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Cost sharing can be defined as

The government pays part and the individual pays the other part of the cost of care.

It is the share of health expenses that a beneficiary for health services must pay, including the deductibles, co-payments, coinsurance, and charges over the amount reimbursed by the funding system.

Introduction of cost sharing is in line with health sector reform as one alternative for improving health care financing.

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The ministry of health appraised the health sector performance with the intention of raising strategies to improve quality of health services and increase equity in health accessibility and utilization.

This appraisal came up in the report named ‘Proposals for health reforms, ministry of Health, 1994 (HSR)’.

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Managerial reforms or decentralization of health services, financial reforms, such as enhancement of user-charges in government hospitals, introduction of health insurance and community health funds.

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National Health Insurance Fund (NHIF)

The NHIF is the outcome of a 1990-1992 study on the long-term options for financing health services in Tanzania.

It was established by an act of parliament: Act No. 8 of 1999.

The scheme commenced its operations on 1st July 2001 by members and their respective employers starting to contribute.

The scheme is compulsory, it covers all public sector employees.

The membership includes principal members their spouses and up to four children and/or legal dependants.

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Where both a couple (man and woman) are both workers in the public service have equal rights to register four different children or dependants.

There are other schemes that also operates in Tanzania, they include

Social health insurance benefit scheme.

The national social security fund (NSSF).

Private health insurance (by some registered insurance companies which have health insurance component).

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Here the patient pays user fees directly out-of-pocket for services rendered to him or her.

In public health facilities the cost is shared between the user of the service and the government whereby user of the service (in the formal cost sharing) are required to pay half of the actual price of the service, which is highly subsidized by the government.

For example, an individual comes to the health facility. This cost is not covered by any insurance, or for any available benefit package, so the client pays from his or her own pocket.

User fees structure varies with district and type of facility.

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A voluntary scheme, which enables a household to pay when they have funds rather than at the time of illness, and members are entitled to access services at the primary health facilities.

It started in 1996 in Igunga district as a pilot scheme and later expanded to other councils with the expectation of covering the whole country, (ministry of health 1999).

The scheme was identified as a possible mechanism granting access to basic health care services to populations in the rural areas and the informal sector in the country.

The aim was not primarily to raise additional funds but rather, to improve access to health care for the poor and vulnerable groups.

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The government system foresees: that the following services should be exempted from paying fees and do not require CHF membership card:

RCH services

TB

Leprosy

Paralysis

Typhoid

Cancer

HIV and AIDS

epidemics

A health facility based waiver occurs when facility waives fee for the provision of services other than the listed above to individuals whom they determined that s/he cannot afford to pay.

This was a government strategy to reduce drug shortage in hospitals and other health facilities in the country.

The government offered initial funds to facilities to buy the medicines and sell them at full price.

The fund was later revolved as capital on purchasing medicines.

This program was not sustainable because of poor drug management, exemption and waivers policy.

Currently very few hospitals, faith based organization facilities operate on DRF.

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Leakage of collection

Inadequate record keeping

Inadequate capacity of staff to carry out finance collection

Lack of incentive

Inadequate monitoring and supervision

Lack of updates in cost sharing policy guideline

Lack of financial accountability

Poor utilization of data collected from health facility.

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Capacity building

Proper record keeping

Provide incentives to revenue collectors

provide guidelines on how to estimate target revenue

to adherence to accounting, procedures

Control mechanism of fund (e.g. use of receipt, Daily Supervision).

Low price ( set price basing on cost sharing guidelines)

Use of appropriate tools of managing fund

Fight Petty corruption

Each of the financing options mentioned above has tools for operationalization, these include tools for user fee and NHIF

Tools for user fee cash

Collection receipts (fixed fee receipts (FFR))

Cash collection book

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Membership ID card

NHIF2A &B health provider in/outpatient claim form & surgery claim forms

NHIF 2D optical requisition and claim form

NHIF 6 monthly report form

NHIF 2C pharmacy prescription/claim form

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Membership ID card

CHF cashbook

Daily patient/cash ledger

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Why to Pay for Health Care?

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The reality of health is that there is an infinite demand for it (never-ending and increasing demand for health services.)

The delivery of health services requires the use of limited resources such as labor, raw materials, production equipment, a building or structure, and finances. Resource availability relative to demand is a fundamental problem of health economics as the health sector absorbs a very high level of resources.

Countries are faced with great challenges as to how to raise resources and best allocate them to produce health services for the people and distribute the available services in an equitable manner.

Countries worldwide have taken different approaches in trying to address these problems trying to find solution as to how best to raise money for health care and then allocate these funds efficiently

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In Tanzania this led to the establishment of alternative financing options, or ‘cost sharing’ for health services. Cost sharing requires that some patients must pay part of the cost of their own services in order to maintain the quality and range of health services available in Tanzania. However, patients who are unable to pay are still covered by exemption options.

How to account for the collected funds

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The appointed in-charge should ensure adherence to income receipt procedures, i.e.

Use of receipts for cash collection: (ERV or by Fixed fee Receipts (FFR)

Do Prompt cash recording (in cash book), income and expenditure

keep money in cash box or safe and / under control keys

Transfer all received money into cash register immediately

Deposit all cash/cheque in the bank on daily basis

No direct use of cash without proper procedure which involves; receipt, banking, raise voucher, authorize, write cheque, authorize to cash money.

Use Cash reconciliation sheet – to countercheck all cash received, paid, and the balances on daily basis. Through the cash reconciliation process, one will be able to find out if there is any deviation from the laid down financial regulations

How to account for expenditure

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Adhere to Payment procedures

Cheque payments should be preferred as opposed to petty cash

All expenditures should be supported by the prior mentioned documents

Ensure that all payments go through the approved system of authorization.

All payment documents should have a mechanism of control to avoid double

payments.“PAID” stamp should be placed on all paid vouchers

Any payment should be kept in the appropriate file

Specimen signatures should be known

Vote book: Memorandum record intended to assist control of expenditure authorized in the budget. Should Show; date, expenditure, total commitments, total expenditure and available balance

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The financial report explains the budgeted amount and the amount received for the planned activities and the way it has been spent.

Prompt report writing as per specified time is mandatory in weekly, monthly, quarterly and annual reports.

Records for fund generated and expenditures incurred per department/section should be kept and maintained.

Deterioration of health services due to single source of financing (government) made it necessary to introduce alternative health financing (health financing options such as cost sharing).

Introduction of cost sharing is in line with health sector reform was one alternative for improving health care financing.

Cost sharing increases commitment and sense of ownership of resources among the users and community.

Good book keeping is a pre-requisite for effective financial management.

It is important for learners to be conversant with the cost sharing tools.

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Describe concept of paying for health care services.

What are the reasons led to introduction of cost sharing?

What cost sharing tools are used in managing cost sharing funds in a health facility?

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