equity implications of health sector user fees in tanzania

have been highlighted in Technical Paper Part 1 and includes; (1) utilization and exclusion, (2)
regressive outcomes of user fees on specific groups, (3) trade-offs at household level, (4) nature of
payment scheme, (5) barriers other then user fees, (6) safety nets, (7) quality, (8) potential of fees at
primary level, (9) adequacy of revenue generated, (10) management, (11) transparency and (12)
community involvement.
2.3 Documentation on exemption and waiver systems
Exemptions and waivers are so-called ‘safety nets’ which aim to protect the vulnerable and poor from
the adverse impact of user fees. Most of the reviewed literature expresses a strong concern that
safety nets tend to protect the poor insufficiently from the adverse impacts of user fees. Case studies
in Kenya indicate that in 1999 waivers rarely exceeded 2 persons per month while 42% of the
population was living below the poverty line. It was also found that 80% of inpatients and 86% of
outpatients were not aware of waivers and exemptions (Owino, 1998 and 1999). Evidence from other
studies indicates both leakage of benefits to ineligible households and inadequate support to the
primary intended beneficiaries (under coverage). This is often related to the existence of complex,
unworkable and inconsistent exemption mechanisms that require too much information and are
therefore costly to administer; lack of public funding to pay for waivers and exemptions; the lack of
guidance on financial management and control practices; and weak administrative systems. Income
criteria as a reason for a waiver are difficult to apply since many poor people work in the informal
sector while fees and income eligibility thresholds are not adjusted to changing circumstances
(Newbrander & Sacca, 1996; Gilson, 1997; Owino, 1998; Price, 2002; Kivumbi & Kintu, 2002, IPAR,
2003; Bitran et al, 2003).
According to UNICEF and Bitran (2003), the performance of exemption and waiver systems is seldom
evaluated. This is considered as a major weakness as the consequences cannot be assessed and
policies cannot be adjusted. Main constraints include; (1) exemption schemes are implemented in
informal and ad hoc ways; (2) exemptions based on the ability to pay are extremely uncommon in
practice; (3) decisions to exempt are often left to the discretion of local service providers; (4) absence
of specialized staff hampers the effectiveness of the waiver procedure; (5) there can be a negative
attitude of health staff towards policies for protecting the poor as waivers mean less income and more
work; (6) the distribution of cards for a waiver or exemption are often cumbersome and lead to high
administrative costs, delay and retention of cards, (7) financial incentives or staff performance are
linked to successfully collecting fees; (8) the characteristics of the poor are generally not defined in a
clear fashion. The lack of clear identification criteria seems to be a major problem; (9) poor people do
not know about exemptions or do not bother because of administrative barriers; and (10) exemption
schemes can be stigmatising and dehumanising.
Positive experiences that improved equity allocations of health services for poor people were found in
Cambodja were an Equity Fund (EF) of the National Hospital financed the cost of health services
(consultation and medicines) at no charge or reduced prices to the poor. A key factor of the EF that
was beneficial to the poor was the payment of health providers for the services delivered. This made
health providers indifferent towards treating regularly paying patients and EF beneficiaries. Other best
practises have been included in Technical Paper Part 1.
2.4 Documented findings on Community Health Funds
Community Health Funds and limited understanding of interaction with other health care financing
schemes
Community Health Funds (CHFs) are a form of community-based health insurance. Community Health
Funds (CHFs) or Community-Based Health Insurance schemes (CBHI) are often mentioned as ‘the
solution’ for the problems generated by user fees. CBHI schemes, where they have been operated
successfully, have offered benefits to the poor. However, the very poor require special arrangements
to enable them to access benefits under the scheme (e.g. subsidies from government or higher
income scheme members); few schemes have effectively implemented these arrangements. A recent
paper (Bennett 2004:147-157), emphasizes that there is actually very limited understanding of how
CBHI schemes interact with other elements of a health care financing scheme. Sofar there has only
been marginal analysis of the impact of the CBHI scheme on the population at large and the possible
effects of the schemes beyond their members. There are virtually no studies that have discussed
CBHI schemes from a system-wide perspective. CBHI schemes cover a bewildering variety of benefit
Equity Implications of Health Sector User Fees in Tanzania 5