equity implications of health sector user fees in tanzania

All in all, there is limited evidence of systematic implementation of the waiver policy or beneficial
impact of this policy on poor people and of insistence on free services by the poor themselves. A
critical issue in this is the absence of a standardised procedure for the identification of the poorest in a
community. Poor people continue therefore to negotiate for their right on a waiver or an exemption
(Mamdani 2003: 12-15).
6.5 Impact of Community Health Funds
CHF Positive findings
The study of Chee et al (2002) in Hanang District of Tanzania, provides valuable insides about the
function of the CHF. A main conclusion of the study was that “While the central government and
basket funds provide the large majority of the total Hanang district budget, the CHF funds do make a
significant contribution to the overall budget”. Total CHF funds constituted 10% of the 2001 budget
through the end of October – CHF membership and user fees accounted for 8% and the matching
grant 2% of this budget. While the total contribution from CHF membership and user fees is significant,
user fees contribute the majority of funds, and continue to grow as a share of total funds collected,
from 20% of fees collected in 1999 to 77% in 2001. While the CHF membership fees account for a
small portion of the total fees collected, CHF member utilization accounts for a significant portion of
total utilization (38-88%).” However, a range of concerns and constraints have been pointed out as
well.
CHF concerns and constraints
Linkage CHF and user fee policy unclear. The introduction of the CHF brings in a whole new
dimension to the user fee discussion in Tanzania. Through the introduction of the CHF, districts will
actually have to deal with varieties of user fee systems and exemption and waiver systems. While the
current user fee system and exemption and waiver system still has to be followed in Referral, Regional
and District hospitals, every CHF (per district) can autonomously decide on their own criteria and
reasons for exemptions (based on community discussions). At this stage there seems to be no
guideline in place how the CHFs have to deal with or have to integrate the formal exemption and
waiver systems. It has been reported that CHFs do not follow the formal exemption and waiver
policies.
Double exclusion and adverse incentives. The income from user fees raised in public health centres
and dispensaries is supposed to form a source of income for the CHF. This will undoubtedly put more
pressure on the public PHC facilities to raise more income through the user fees. In this context, it can
be assumed that the introduction of user fees at PHC level is probably driven by the fact that user fees
at this level will have to form a source of income for the CHFs. This development might lead to a
double exclusion for poor people who (1) cannot afford the user fees at any level but (2) can also not
afford the CHF premiums. Another side of the coin is that if (1) the income of user fees cannot be
retained at PHC facilities (for quality improvement) and (2) the CHF funds are not adequately used for
quality improvement in PHC facilities, health workers might not have an incentive to collect fees. On
the contrary, there is however a clear incentive to raise as much income from CHF premiums as
possible since the WB funds will match the premiums of the CHF. This implies that it is not attractive at
all for CHFs to provide many exemptions for CHF premiums since this will reduce their potential
income from the matching funds. Combined with the fact that the CHFs have to identify alternative
means to compensate for the money lost through exemptions, one can assume that the CHFs will
most likely (1) not be very eager to provide exemptions to the poorest people and (2) not be eager to
utilise CHF resources to pay the CHF premiums or user fees for poor or vulnerable people.
A recent evaluation of CHFs in Tanzania shows very low membership levels. CHF contributions
through pre-payment cards have not exceeded 30% of the households and are stagnant or declining
over time (Chee et al, 2002; in Bonu et al, 2003). Bonu et al (2003) relate the poor performance of
CHFs to a lack of desired quality of care. According to Bonu et al (2003), higher participation in a costsharing
scheme is contingent on availability of desired quality of care. 35 Those who register initially
into a cost-sharing scheme may drop out quickly if the quality of care does not reach prior
35 According to Price (2002), “numerous studies have aimed to show that quality is more important than price.
Increase quality outweighs the negative effects of user charges, and when charges are introduced, clients come
to expect quality services, that are tailored to client’s needs.”
Equity Implications of Health Sector User Fees in Tanzania 27