User Fees in Health Care
PST 06105: HEALTH FINANCING
Session
3: User
Fees in Health Care
Learning Tasks
At the end of this session students are expected to be able to:
Define
user fee
Explain
how user fee operates in the health sector
Enumerate
advantages and disadvantages of user fee
Activity: Brainstorming
What
is user fee?
3
User fee (
user charges)
I
s
a basic health financing mechanism where a user of health
services
is a charged a fee at the point of service delivery. A fee is charged to cover all
or part
of the cost of services provided
Is defined as a
“financing mechanism that has
two main
characteristics: payment is made at the point of service use and there is no
risk sharing
”
Lagarde
& Palmer (2008 p.839)
User fees charged to users of health services cover related drug costs, supply and
medical material
costs, entrance fees or consultation fees.
User fee is the commonest method of financing health services in Sub-Saharan
Africa which
was widely and actively promoted during health sector reforms in 1990s (
Gilson,1997
)
User fees commonly regarded as a means of raising revenue and as a means
of discouraging
what may be viewed as „unnecessary demand‟.
Operation
of User Fees
Operation
of User Fees
As shown
in the previous figure: user
fees financing mechanism involves two parties:
User
of health services
Provider
of health service.
Users
of health services pay financial resources (to cover partial or full cost of
healthcare
) in form of fees in order to receive health service from the providers.
The providers of
health services receive financial resources (incomes) from users of health services. The
Operation
of User Fees
In setting fees, providers of health services are guided by the following principles:
Ability
to pay: fees should be consistent with the ability to pay
Relating
quality to fees: fees and quality should be linked
Successful operation of user fees financing in public health facilities depend on
the presence
of the following conditions:
Well-defined
entrance points at the point of health facility
The
issuance of receipt with duplicate copies to serve as evidence of payment
A
rigorously enforced system for determining those eligible for exemption
Training
of staff to promote the importance of enforcing collection
Periodic
spot checks to establish that above points are being carried out by all staff
Periodic
audits of the financial transactions and flow of fund
Activity:
Small group discussion
What
are advantages and disadvantages of user fees
as
health financing
?
8
Advantages of
User Fees
It
generate
additional financial resources
for improving health services, range
in from
1.2-20% of total health expenditure
It
is simple and consistent with other goods and services
Drug
availability and the quality of care can be improved
Equity
is promoted because limited public resources can be targeted to those
most in
need
Decentralization
is reinforced through local control of
resource
It
allows some form of participation of health services by users (but not the
community
)
It
can be used to discourage bypassing of referral health systems
Disadvantages
of User Fees
User
fee tended to deter (delayed access and use care) the poor people from
utilization of
basic health services they needed than non-poor people
It
encourages self – medication and use of informal health services – health
risk behaviors
that are not conducive to good health
Costs
of collection and accounting may be significant
It
discourages real health needs of the poor and sick people: the most regressive (low
income
earners pay more) form of financing health care
It
may encourage impoverishment at family level
User
fee can encourage health service provider to have ineffective
behaviors
at
delivery
point services – provide unnecessary treatments that did not match
with health
needs
Exemption
policy implementation, aimed to protect the poor, is not
practiced effectively
Key Points
User
fees is one the common health financing mechanisms used to finance health
services in
developing and developed countries
User
fees involve two parties in health service: user of health services and provider of
the health
service
Successful
implementation of user fees in public health facilities depend meeting
some conditions
User
fees as a financing mechanism has both advantages and disadvantages
Evaluation
What
is a user fee?
What
are the conditions for effective implementation of user fees in Tanzania?• What are the advantages of user fees as a financing mechanism?
What
are three disadvantages of user fees as a financing mechanism?
Reference
Gilson
Planning, 12(4
), 273-285.
Gottret
, P.
Schieber
, G. (2006). Health financing revisited: a
practioner’s
guide. World Bank
Green
, A. (2007). An introduction to health planning for developing health systems. Oxford:
Oxford
University Press.
Jiyenze
, M. K. (2013). Health care financing and resource allocation: handout for teaching
health
care financing.
Arusha
: CEDHA. [Notes:
Unpublished]
Mubyazi
, G.,
Massaga
, J.,
Kamugisha
, M.,
Mubyazi
, J. N.,
Magogo
, G. C.,
Mdira
, K. Y
Gesase
, S.,
Sukwaz
, T. (2006
). User
charges in public health facilities in
Tanzania: effect
on revenues, quality of services and people's health-seeking behaviour
for malaria
illnesses in
Korogwe
district. Health Services Management and
Research, 19(1
), 23-35.
Reference
Tanzania.
MoHSW
(2014). DHM Healthcare financing module. Dar
es
Salaam:
MoHSW
WHO
(2003). Mental health financing. Geneva, WHO.
World
Bank (1987). Financing health services in developing countries: An agenda for
reform
. Washington: International Bank for Reconstruction and Development/
he World
Bank.
World
Health Organization. (2017). Developing a national health financing strategy: a
reference
guide. Geneva: World Health
Organization
Gilson
planning
, 12(3),
273-285.
Lagarde
, M., & Palmer, N. (2008). The impact of user fees on health service utilization in
low-and
middle-income countries: how strong is the evidence?. Bulletin of the
World Health
Organization, 86, 839-848C.
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