equity implications of health sector user fees in tanzania

expectations. It appears that those who ultimately remain in a pre-paid cost-sharing scheme like the
CHF are determined by ‘adverse selection’, where people with greater health needs remain in the
CHF despite other disincentives – like poor quality – to avoid high health care costs under the
alternative fees for services. Bonu et al (2003) conclude that their findings suggest that the current
CHF and user fee schemes in lower-level health facilities in Tanzania need to design effective built-in
mechanisms to protect women, the poor and elderly populations from adverse effects. Similar to
declining institutional delivery rates observed among poor women after the introduction of user fees in
higher level facilities, adverse effects might also be observed in primary health care for the poor on the
introduction of CHFs and user fees in lower-level facilities, unless accompanied by effective exemption
and waiver policies. Table 6.4 provides an overview of main findings shows that the implementation of
CHFs, while a positive development, is not without problems.
Table 6.4: Documented CHF findings in Tanzania
Low CHF
implementation
and enrolment
Management
Affordability
and
willingness to
pay
� The roll-out of CHFs to districts has been severely delayed and seems stagnant.
� The CHF enrolment is below the target of 60% of the district households. The
enrolment ranges between 3-28% with the majority of districts reporting 5% (as such
contributions have also remained low). Reason for the low enrolment seems to be that
households have to pay the premium of Tshs. 10,000/= at once. The composition of
members is a mix of less well off and wealthy, leaning to the well off, educated and
middle class since civil servants were required to join as well. The poorest households
do not join. The CHF in this form leads to exclusion of the poor.
� Districts are not clear on CHF management. Political interference affects CHF
implementation. District leaders do not fully support the CHF system. Starting up fund
seems inadequate. Obtaining WB matching grant is time-consuming.
� Effective implementation of payment schemes requires a strong decentralised
management structure. Mismanagement of CHF funds occurred with 27% of CHF
implementers. Financial management systems at WHC and HF level are poor. Delays
have occurred in the utilisation of collected funds due to delays in compiling plans to fit
in with the district planning cycle.
� Communities have little participation in the CHF management and fee setting. The
concept of insurance is not well understood. Awareness on benefits is low (38%). WHC
plans for CHF face delayed approval and bureaucracy.
� It is estimated that 65% of the households have an annual income of less then Tshs.50,
000/= per year in districts where CHFs are established. On average, 27.5% indicate
they would not be able to afford the premium of a CHF card.
� Districts report that 82% of the people are willing to pay Tshs. 3,000/= and 62% is
willing to pay Tshs. 5,000/= for a CHF card.
� Availability of medical supplies and quality improvement are considered as essential for
willingness to pay a user fee or CHF premium. In total 50% of patients and health
workers reported HF improvements (drugs, diagnostic facilities, maintenance) after
CHF introduction.
Exemptions � Communities are not well aware on the exemption criteria and exemption procedures.
By CHFs. Exemption guidelines are neither well understood nor followed by CHFs.
� Protection of the poor is not guaranteed in the CHF. A planned scheme to provide
selected households with free CHF cards has not been implemented in the 18 months
after the CHF take-off. Together with non-functioning user fee exemption and waiver
mechanisms, the poor are not protected from the burden of the health care costs.
Source: Chee et al, 2002, Hutton 2003, Baraldes, et al, 2003, MOH 2003, Bonu, et al, 2003
6.6 Stakeholder Views
6.6.1 General observations from the interviews
Rationale and achievements of user fee policy objectives
There was general consensus among the interviewed stakeholders on the main reasons why user
fees were introduced in Tanzania: revenue raising, enhancing equity, reducing frivolous consumption
and improving quality of care. Few interviewees associated user fees with poverty reduction as a
rationale for their introduction. Stakeholders’ responses indicate that they find it very difficult to give a
correct, conclusive statement on the extent to which user fees have achieved their objectives. Due to
inadequate financial management systems, there is likely to be a gross over- or understatement of the
actual contribution from user charges. However, most respondents agreed that user fees have
contributed significantly to quality improvements in some specific areas, such as the availability of
drugs. However, this was more based on their personal impression then on reliable data.
Equity Implications of Health Sector User Fees in Tanzania 28