equity implications of health sector user fees in tanzania

eported income proportion for the health sector was 10.5% but variations were reported between 1%
and 22%. The average income per capita from cost sharing across the Councils was Tshs. 105/=
varying between Tshs. 5/= per capita in Mufindi Council and Tshs.305/= per capita in Muheza Council.
Three Councils reported the proportion of the overall funds for health collected through the CHF. This
was respectively 2%, 5% and 13% with an average of Tshs. 53/= per capita collected in 2000. There
was no information available on how the income from cost sharing and CHF was re-distributed by the
Council to PHC facilities or priority areas. The vast majority of the overall health funds were allocated
towards recurrent costs. Personnel Emoluments, Drugs and Medical Supplies consumed 82% of total
expenditures.
Contribution of user fees to the resource envelope at national level
The MOH/SDC PER Update 2001 analysed the locally generated funds and was able to make a
distinction between data available on the Community Health Funds operating in primary health centres
and the cost sharing Health Services Fund (HSF) operating in hospitals. Data for the years FY02 to
FY04 were projected data. At that time, it was expected that the revenue gained from these sources
would increase over the medium term. A conservative projected estimate was made (Table 5.1),
based on the patterns observed in FYs 1997/98 – 2000/01 (doubling of CHF money year per year, and
multiplication of 1.5 year per year for the hospital cost sharing schemes). The study team used the
data to estimate the contribution of the Health Services Fund (HSF) and CHF to the National
Resource Envelope (RE) for Health. It was estimated that the 2003/04 projected contributions of the
HSF and CHF would respectively be 4% and 0.7% of the resource envelop.
Table 5.1: Health Resource Envelope and locally generated funds (Billion Shillings), Tanzania
2000/01 2001/02 2002/03 2003/04
Health Services Fund (HSF)
Hospital
2,752,800,000 4,129,200,000 6,193,800,000 9,290,700,000
Community Health Fund – PHC 207,200,000 414,400,000 828,800,000 1,657,600,000
Total 2,960,000,000 4,543,600,000 7,022,600,000 10,948,300,000
Proposed funding ceilings for the health sector, 2001/02 – 2003/04
2000/01 2001/02 2002/03 2003/04
Grand Total Resource Envelope
Health
180,347,442,232 182,506,819,160 202,449,584,160 224,599,724,598
Percentage of HSF-Hospital 1.13% 1.7% 2.6% 4%
Percentage of CHF-PHC 0.09% 0.175% 0.35% 0.7%
Source: Extracted from MOH/SDC PER 2001.
From the various studies it is clear that the available data on user fees, CHFs and National Health
Service Fund are unreliable. It has become evident that contributions of the various schemes are
underreported due to weak management and administration of funds.
Overall conclusion
The overall conclusion of the MOH/DFID PER 2002 Update was that there is a great need for more
accurate and comprehensive record keeping at local council level. The study concluded that the
findings pointed to a great need for more costing and tracking studies to obtain a better picture on cost
sharing and expenditures (MOH/DFID, 2002:29-44). Even more concerning is that the findings from
the PER studies (2001 and 2002) imply that the MOH should actually have a higher income from the
user fees than what is currently reported. This means that the MOH has a loss of income that cannot
be re-distributed in the health sector. In addition, it is most likely that people (both rich and poor)
probably pay much more for health services than what is officially reported. These assumptions are
concerning since it is difficult (1) to establish precisely the total amount of the non-reported income
and its potential contribution to the resource envelope for the health sector, (2) to know how exactly
the non-reported income is used at different levels and (3) to know what people actually have to pay
for health services at different levels. In relation to the latter, it was estimated with the FY04 income
data from cost sharing schemes (1.67 Billion Tshs.), that with a population of 35,000,000 people in
Tanzania, each person has to pay at least Tshs. 47,71/= per person per year to maintain the official
reported level of cost sharing income. This does not seem a realistic figure given the fact that so many
people indicate that the costs of health services are not affordable! This clearly must indicate that the
available figures do not predict the actual equity implications of the user fees on poor people in terms
of level of payments and can therefore not really be used for realistic policy formulation.
Equity Implications of Health Sector User Fees in Tanzania 19