equity implications of health sector user fees in tanzania

2. Groups with most regressive outcomes for user fees. Population groups that have been identified
as being most vulnerable to payment difficulties are: (1) women, particularly widows, divorcees
and unmarried women with children (i.e. female-headed households); (2) the very old, especially
those who live alone and are too old to earn an income; (3) the ultra poor; (4) those without
extensive family and social networks (because common strategies to cope with payment
difficulties include borrowing from family or friends); and (5) households with high dependency
ratios, particularly those with many young children and elderly dependents (Booth et al, 1995,
based on a study in Zambia; cited in Russell, 1996; see also Bangser, 2002, on the impact of user
fees on women).
3. Trade-offs at the household levels. Few studies have analyzed the impact of user fees at the
household level (particularly poorer households) and their ability to pay (impact on household
budgets, consumption and investment decisions). Russell (1996) points out that this is,
nevertheless, an extremely important area of attention, since households often face a combined
user fee burden from various essential services. Russell’s study concludes that households, in
order to mobilize resources, may sacrifice other basic needs such as food and education, with
serious consequences for the household or individuals within it. Common household responses to
payment difficulties (‘coping strategies’) range from borrowing to more serious ‘distress sales’ of
productive assets (e.g. land), delays to treatment, use of informal and less effective sources of
health care, and, ultimately, abandonment of treatment. Further impoverishment of already
marginalized families has also been reported (Russell, 1996; Gilson, 1997).
4. Nature of payment scheme. The nature of the payment mechanism has an important influence on
its utilization and equity impact. Pure user fee systems are more likely to enhance inequities in
access to health care than those which allow for risk-sharing and/or pre-payment (various authors;
in Gilson, 1997).
5. Barriers other than fees. Several authors point out that in addition to prices, other factors pose a
barrier to accessing health care, particularly for the poor: (1) quality of care, (2) travel time, (3)
travel costs, (4) waiting times, (5) staff attitude, and (6) inconvenient opening hours (see e.g.
Price, 2002; Bennet & Wilson, 2001).
6. Safety nets. The implementation of both formal and informal exemptions is usually ineffective and
fails to protect the poor (and may benefit more wealthy groups). In some cases, there is a lack of
official exemption categories or a lack of good understanding of these categories (see e.g.
Nyonator & Kutzin, 1999). Exemptions are rarely implemented when the primary objective of the
fee system is financial sustainability, because they necessarily lower revenue generation levels.
The differential implementation of fees between geographical areas within a country can create
geographical inequities as more wealthy areas charge less than poorer areas, particularly if
regions of different income level are expected to recover similar proportions of their cost (various
authors; in Gilson, 1997).
7. Quality. Increases in user fees have rarely been accompanied by improvements in quality (Bennet
& Gilson, 2001). Various country studies suggest that if fees are associated with quality
improvements (e.g. increased availability of drugs in health facilities), their negative impact on
utilization appears to be offset, and the introduction of fees-plus-quality improvements may even
generate utilization increases among the poorest (see e.g. Nyonator & Kutzin, 1999). However,
the required quality improvements cannot be addressed simply by revenue collection (various
authors; in Gilson, 1997; Nyonator & Kutzin, 1999).
8. Potential of fees at hospital versus primary care level. There appears to be a greater potential for
user fees within hospitals rather than in primary facilities. Generating higher revenue levels without
harming the poor appears to be most possible where the presence of risk-sharing arrangements
allows cost-recovering fees to be charged for those insured against the need for hospital care.
This finding is based on positive outcomes of cost recovery schemes at hospital levels in China,
Zaire, Brazil, Korea and Kenya (various authors; in Gilson, 1997).
Technical Paper 2