equity implications of health sector user fees in tanzania

funds to dispensaries and health centres. This clearly is not a pro-poor development since it severely
affects the people who require health services at PHC level. This observation implies that even if
public expenditure at central level is pro-poor, the leakages of funds within the districts can counteract
this initiative. This means that massive efforts for improved accountability should be directed to the
district level in order to ensure that funds reach the intended beneficiaries. While the share of the
health sector in the government budget is declining, the proportion of foreign funds has gone up. This
trend has been strongly criticized by the donors, who have questioned the true commitment of
Tanzania to the PRSP objectives. The reasons for the declining GOT commitment to health did not
become clear in this study, but it certainly is a trend that should be reversed.
Contribution of the user fees and CHF to the health resource envelop
Reliable and transparent user fee income data for district, hospital and PHC level in the health system
are difficult to obtain. The available data are merely indicative for what is happening at the different
levels. Revenues raised from user fees at the hospital level have been low compared to what has
been projected. Data reflect huge variations and a decline in cost sharing revenues. The reasons of
the reported decline are unclear. The data reflecting the contribution of the user fees and CHF to the
health budget at District Council level shows huge variations as well. The reported user fee income
proportion for the District Health Budget was on average 10.5% but variations between 1% and 22%
were reported. It could not be established how the income from cost sharing and the CHF was redistributed
by the council to PHC facilities or priority areas. It was furthermore found that a number of
councils do not spend all the health resources in the health sector! It is clear that there is an urgent
need for (1) more accurate and comprehensive record keeping at local council level, and (2) more
costing and tracking studies to obtain a better picture on cost sharing and expenditures.
It is concluded that the national projections of the cost sharing schemes do not reflect an accurate
picture since the data are based on the financial data received from the districts. It can be assumed
that the actual and projected data on user fees, CHFs and HSF are under-estimations of the real
income collected at different levels. This means that the MOH should actually receive a higher income
and faces a loss of income that cannot be re-distributed into the health sector. On the other hand, it
implies that people (both wealthy and poor) probably pay more than what is officially reported. The
actual potential and use of the non-reported user fees are not known. Hence, it is not unclear what
people actually pay for the health services they receive.
The total contribution of the cost sharing schemes (excluding NHIF) to the national health resource
envelope for FY03/04 is 1.67 Billion Tshs. This equals a contribution of only 0.6% to the overall budget
for the health sector. In total, this is US$ 1.56 million (and on average US$ 13,805 per district). It was
established that this amount would be the lost revenue if user fees would be abolished in the health
sector. This is a much lower amount than the amount of lost revenue lost in Uganda (US$ 6 Million),
while Tanzania has a larger population. Given the size of the total health budget (US$ 260 million), it
can be concluded that the officially reported user fees contribute only a small proportion to the overall
health sector resource envelope in Tanzania. The actual revenue generated does not meet the initial
expectations. There is limited positive evidence indicating that user fees in Tanzania have achieved
their original objectives of sustainability, drug availability, quality of care, equity and access for the
poor.
Contribution of revenues to the quality of services at PHC level
It can be concluded that the reviewed documents do not reflect a differentiated and representative
overview of the contribution of user fee income to improved quality of services in health centres and
dispensaries. User fees were not systematically collected in all PHC facilities since 1999. Some areas
are known to have refrained from introducing user fees at this level. Available data are not
transparent. It was observed that government-run PHC facilities appeared to face severe shortages of
drugs and supplies. User fees were not always retained at PHC level but deposited in the HSF
account which mainly benefits the purchase of supplies for the District hospital instead of PHC
facilities. Positive results were seen with the re-investment of CHF funds. In total, 50% of the health
workers and patients reported improvements in the health facility (drugs availability, diagnostic
facilities and maintenance). However, it can be concluded that equity criteria for the distribution of
available resources from the user fee income to PHC level are not systematically followed.
Equity Implications of Health Sector User Fees in Tanzania 36