equity implications of health sector user fees in tanzania

� Implementation of fees at the lowest, poorest levels within the system where little revenue can be
generated.
� Lack of co-ordination and fine-tuning between fee levels across the health system, with the
potential to create perverse utilization levels (e.g. user fees at secondary levels are lower than at
primary levels) and inequities (e.g. higher fee levels in poorer areas).
2. Poor capacity for local level financial management and fee system implementation
� Lack of financial management skills throughout the health system, but especially at district or
community level.
� Lack of appropriate financial management information and audit systems.
� Lack of information with which to target the poorest effectively through exemptions.
� Limited local authority to take appropriate resource use decisions without reference to higher
authorities.
� Limited effectiveness in collecting fee revenue, undermining revenue generation rates and
revenue use of quality improvements.
� Lack of guidance on financial management and control practices, e.g. on who is eligible for
exemptions; how to account for revenue generated; and on procedures for using revenue.
� Failure to retain fee revenue locally, undermining the incentive to collect it and user it for local
level quality improvements.
� Total retention of revenue locally leading to limited redistribution of resources between
geographical areas with different capacities to raise revenue.
� No procedures that would allow the impact of policy implementation to be monitored.
3. Weak supporting systems
� Poor quality public services which undermine the population's willingness to use services (e.g.
drug shortages, unfriendly staff).
� Inadequate human resource policies which do not promote or sustain staff morale.
� Inadequate drug supply and distribution systems.
� Operational inefficiencies within the health system which contribute to quality failures (e.g. drug
wastage and abuse leading to shortages).
� Limited funding for the supervision and support needed by the primary level.
� Inadequate management information systems e.g. which do not allow resource use to be related
to services provided.
� Organizational structures which generate weak and conflicting lines of accountability both
downward to community level, and upwards to technical supervisors.
4. Contextual constraints
� The population's lack of experience in paying for public health services, which generates an
unwillingness to pay for them, particularly when perceived quality is low.
� Weak banking and communication systems, undermining local level financial management and
the potential for support.
� A variety of socio-cultural and political constraints at both local and national levels, that e.g.
preclude consideration of the needs of the poor in decision making, allow richer groups to be
incorrectly exempted (leakage) and prevent the reallocation of resources to primary health care
that would most benefit the poorest.
2. Enhancing the impact of user fees on their objectives – lessons for policy design
1. Fee system design
� Use a simple fee structure, linked to treatment received (e.g. prescription fee).
� Set affordable price levels.
� Use simply-to-apply exemption categories (e.g. characteristic targeting).
� Ensure the price structure is advertised within health facilities.
� Coordinate the price structure across health system levels.
� Readjust prices periodically.
� Ensure that some revenue is retained at the point of collection for use in quality improvements.
� Establish guidelines and procedures to promote revenue use for perceived quality improvements.
� Develop community mechanisms at primary levels.
Technical Paper 22