equity implications of health sector user fees in tanzania

ANNEX 1 TERMS OF REFERENCE
Equity Implications of Health Sector User Fees
in Tanzania
Research and Analysis Working Group
Purpose of the analysis
The proposed analysis will examine the equity implications of the user fee system in Tanzania, with
particular reference to proposed (and actual) charges at primary health care facilities. The analysis
will contribute to the current review of the Poverty Reduction Strategy (PRS) and seeks to address
one of the guiding PRS questions in relation to health:
"The Government should consider suspending cost sharing for
basic health services at least until the time when an effective
system of exemptions for the poor is put in place. In preparing
for this, a cost-benefit assessment should be undertaken to
determine how much is gained by fees as compared to how much
is lost by excluding the poor."
Policy Eradication Division, Vice President’s Office
The analysis will be a review of relevant literature on the subject from Tanzania, regionally and
internationally in the form of research studies, Ministry of Health documents, academic papers as well
as “gray literature” from non-governmental organizations and community based groups that have
documented the impact of user fees on the poor. It will also include key stakeholder interviews with
officials from Ministry of Health, Ministry of Finance, PoRALG and other agencies; civil society; and
donors. See “Methodology” section below for further details.
Three overall questions will guide the analysis:
1. What has been the impact of user fees in the health sector?
2. What might be the potential impacts of further extension/roll out of user fees to the dispensary
and health centre level?
3. What options exist for revising the current user fee system to achieve greater equity and
effectiveness?
Details are provided in the “Key Issues” section below.
Background
Since the 1980s, and particularly in the wake of economic structural adjustment programmes, many
African countries have implemented user fee systems in the health sector. The rationales for user
fees have focused on raising revenue, enhancing efficiency and sustainability, improving services,
reducing “frivolous consumption” of health care, substituting formal fee systems for informal charging,
extending coverage and increasing equity. At the same time, numerous key policy documents at both
the international level and in Tanzania specifically have focused on goals of improving access, equity,
special attention to vulnerable groups and the reduction of poverty (Vision 2025, Poverty Reduction
Strategy, Tanzania Health Policy, Tanzania Health Sector Strategic Plan, etc.).
Evidence suggests mixed results in achieving goals of improved services and greater equity through
the establishment of user fees in health. While fees have, in some case, generated needed income
for health facilities, several studies show that revenues generated are often not more than 5-10
percent of recurrent costs (although could cover a higher proportion of non-recurrent costs). In
addition, that user fees are often not accompanied by improvements in quality or availability of drugs.
While there is some evidence that fees bring needed resources to health facilities in Tanzania, the
2003 Public Expenditure Review for the health sector states: “cost-sharing to date has contributed
relatively little to the overall sectoral resource envelope.”
Equity Implications of Health Sector User Fees in Tanzania I