equity implications of health sector user fees in tanzania

I INTRODUCTION
1.1 Background to the study
The Research and Analysis Working Group (R&AWG) of Research for Poverty Alleviation (REPOA)
commissioned the public health consultancy group ETC Crystal to carry out an in-depth analysis of the
Equity Implications of the Health Sector User Fees in Tanzania. The study was carried out in the
period 3 rd March to the 5 th June 2004 by Ms. Leontien Laterveer, Mr. Michael Munga and Ms. Patricia
Schwerzel. The Terms of Reference (TOR) was the guiding document for the study (see Annex I).
1.2 Purpose and objectives of the analysis
With the findings of the analysis, REPOA aims at making a meaningful contribution to the Poverty
Reduction Strategy (PRS) Review Process taking place this year in Tanzania. The main purpose of
the analysis was to examine the equity implications of the user fee system in Tanzania with particular
reference to proposed and actual charges at Primary Health Care (PHC) facilities. 1 The analysis
aimed 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 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.”
(Statement made during a Poverty Reduction workshop, 2003)
The main objective of the analysis was to examine how much is gained by the user fees in the health
sector as compared to the impact of fees on the access of poor people to health care services,
especially at the primary level of care. The analysis examined the following critical issues:
1. The impact of user fees in the overall health sector and more specifically in relation to (1) their
contribution to the overall resource envelop, (2) resources generated and used at facility level, (3)
contribution of generated revenue to improved services, (4) transaction costs and administration
requirements, (5) payment of “unofficial fees” by the poor, (6) local ownership, accountability and
provider responsiveness, (7) access to services for the poor, and (8) effectiveness of exemption
and waiver mechanisms.
2. The potential impacts of further extension of user fees to the dispensary and health centre level in
relation to the issues mentioned under 1.
3. Options that exist for revising the current user fee system to achieve greater equity and
effectiveness.
1.3 Equity definition, research questions and methodology
Working definition of Equity
In the literature a wide range of definitions of equity 2 can be found. The study team opted for a working
definition which is much in line with the priorities mentioned in the TOR and by the members of
R&AWG:
Equity means that everyone should, in practice, and not just in theory, be able to access and
use appropriate health services. Health services should not only be for the dominant
population group. This implies equitable access and use, given that some people will need
more health care than others. It also means that we should seek to minimize inequalities in
health outcomes. The main elements of a just health care system can be listed as universal
access, access to responsive care and fairness in financing (Healy and Mckee, 2004).
1 PHC facilities include Health Centers and Dispensaries
2 A distinction must be made between equity and equality. Whereas equity deals with fairness, equality is
concerned with equal shares (Carr-Hill 1994:1190; Donaldson & Gerard 1993:73; Wagstaff, Van Doorslaer & Paci
1991:145; in Laterveer, 2001).
Equity Implications of Health Sector User Fees in Tanzania 1