The impact of the introduction of user fees at a district hospital in Cambodia

Proponents of user fees in the health sector in poor countries cite a number of often interrelated rationales, relating inter alia to cost recovery, improved equity and greater efficiency. Opponents argue that dramatic and sustained decreases in service utilization follow the introduction of user fees, highlighting evidence that user fees reduce service utilization when they fail to result in improved quality of care and/or when services are priced higher than those charged by private health care providers. Utilization of public health services in Cambodia is low. Supply-side factors are significant determinants of such low public sector utilization, including low official salaries of service providers (forcing many to seek additional income in the private sector), and operations budgets which are erratic and often insufficient to cover running costs of service delivery outlets. The Cambodia Ministry of Health (MOH) encourages user fee schemes at operational district level. By allowing revenue to be retained at the health facility level, the MOH aims to improve health care delivery--and consequently service utilization--through increased salaries to health facility staff and increases in operations budgets. This case study of the introduction of user fees at a district referral hospital in Kirivong Operational District in Cambodia, using the findings from empirical research, examines the impact of user fees on health-careseeking behaviour, ability to pay and consultation prices at private practitioners. The research showed that consultation fees charged by private providers increased in tandem with price increases introduced at the referral hospital. It further demonstrates--for the first time that we are aware of from the available literature--that the introduction and subsequent increase in user fees created a 'medical poverty trap', which has significant health and livelihood impact (including untreated morbidity and long-term impoverishment). Addressing the medical poverty trap will require two interventions to be implemented immediately: regulation of the private sector, and reimbursing health facilities for services provided to patients who are exempted from paying user fees because of poverty. A third, longer-term initiative is also suggested: the establishment of a social health insurance mechanism.     

Removing user fees: learning from international experience to support the process

Removing user fees could improve service coverage and access, in particular among the poorest socio-economic groups, but quick action without prior preparation could lead to unintended effects, including quality deterioration and excessive demands on health workers. This paper illustrates the process needed to make a realistic forecast of the possible resource implications of a well-implemented user fee removal programme and proposes six steps for a successful policy change: (1) analysis of a country's initial position (including user fee level, effectiveness of exemption systems and impact of fee revenues at facility level); (2) estimation of the impact of user fee removal on service utilization; (3) estimation of the additional requirements for human resources, drugs and other inputs, and corresponding financial requirements; (4) mobilization of additional resources (both domestic and external) and development of locally-tailored strategies to compensate for the revenue gap and costs associated with increased utilization; (5) building political commitment for the policy reform; (6) communicating the policy change to all stakeholders. The authors conclude that countries that intend to remove user fees can maximize benefits and avoid potential pitfalls through the utilization of the approach and tools described.     

User charges in government health facilities in Kenya: effect on attendance and revenue

In this paper we study demand effects of user charges in a district health care system using cross-sectional data from household and facility surveys. The effects are examined in public as well as in private health facilities. We also look briefly at the impact of fees on revenue and service quality in government facilities. During the period of cost-sharing in public clinics, attendance dropped by about 50%. This drop prompted the government to suspend the fees for approximately 20 months. Over the 7 months after suspension of fees, attendance at government health centres increased by 41%. The suspension further caused a notable movement of patients from the private sector to government health facilities. The revenue generated by user fees covered 2.4% of the recurrent health budget. Some 40% of the facilities did not spend the fee revenue they collected, mainly due to cumbersome procedures of expenditure approvals. The paper concludes with lessons from Kenya's experience with user charges.     

Costs and financing of improvements in the quality of maternal health services through the Bamako Initiative in Nigeria

This paper reports on a study to assess the quality of maternal health care in public health facilities in Nigeria and to identify the resource implications of making the necessary quality improvements. Drawing upon unifying themes from quality assurance, basic microeconomics and the Bamako Initiative, locally defined norms were used to estimate resource requirements for improving the quality of maternal health care. Wide gaps existed between what is required (the norm) and what was available in terms of fixed and variable resources required for the delivery of maternal health services in public facilities implementing the Bamako Initiative in the Local Government Areas studied. Given such constraints, it was highly unlikely that technically acceptable standards of care could be met without additional resource inputs to meet the norm. This is part of the cost of doing business and merits serious policy dialogue. Revenue generation from health services was poor and appeared to be more related to inadequate supply of essential drugs and consumables than to the use of uneconomic fee scales. It is likely that user fees will be necessary to supplement scarce government budgets, especially to fund the most critical variable inputs associated with quality improvements. However, any user fee system, especially one that raises fees to patients, will have to be accompanied by immediate and visible quality improvements. Without such quality improvements, cost recovery will result in even lower utilization and attempts to generate new revenues are unlikely to succeed.     

Are people willing and able to pay for health services?

Following a nationwide increase in user fees for health services in Swaziland, this paper analyzes the effect of the fee increase on overall patient use of health services, on which types of services, curative vs preventive, were most affected, and on changes in utilization by higher paying and lower paying groups. Patient attendance data from a 71% sample of government and mission health facilities, suggests that the 'people are willing and able to pay for health services' assertion is not supported by the Swaziland case. Following the fee increase, average attendance decreased at government facilities by 32.4%, increased at mission facilities by 10.2%, leading to a combined decline of approx. 17%. Patient visits designed to protect against childhood diseases, BCG and DPT immunizations, or against dehydration in children, show average attendance declines of -16, -19, and -24%, respectively, while visits for musculoskeletal diseases, a less serious disease, declined 1.2%. The analysis also suggests that up to 34% of the overall decline in attendance was among patients who previously had paid the least for health care with part of this decline likely including fewer multiple visits.     

Understanding the impact of eliminating user fees: utilization and catastrophic health expenditures in Uganda

There is currently considerable discussion between governments, international agencies, bilateral donors and advocacy groups on whether user fees levied at government health facilities in poor countries should be abolished. It is claimed that this would lead to greater access for the poor and reduce the risks of catastrophic health expenditures if all other factors remained constant, though other factors rarely remain constant in practice. Accordingly, it is important to understand what has actually happened when user fees have been abolished, and why. All fees at first level government health facilities in Uganda were removed in March 2001. This study explores the impact on health service utilization and catastrophic health expenditures using data from National Household Surveys undertaken in 1997, 2000 and 2003. Utilization increased for the non-poor, but at a lower rate than it had in the period immediately before fees were abolished. Utilization among the poor increased much more rapidly after the abolition of fees than beforehand. Unexpectedly, the incidence of catastrophic health expenditure among the poor did not fall. The most likely explanation is that frequent unavailability of drugs at government facilities after 2001 forced patients to purchase from private pharmacies. Informal payments to health workers may also have increased to offset the lost revenue from fees. Countries thinking of removing user charges should first examine what types of activities and inputs at the facility level are funded from the revenue collected by fees, and then develop mechanisms to ensure that these activities can be sustained subsequently.     

Overview: health financing reforms in Africa

Three broad strategies for health financing reform include: 1) cost recovery through user fees to expand access and improve quality of health services along with means testing to increase equity; 2) reallocation of existing resources to improve efficiency and access; and 3) assessment of the efficiency and quality of private health providers for making better use of the private sector in expanding access to quality health services. Research on the extent to which cost recovery reforms have improved access showed mixed results. A 1993 survey of more than 50 user fee experiences in Africa showed that in roughly half the cases, utilization either remained the same or decreased, whereas in the other cases, utilization increased after fees were introduced. Pilot tests of alternative cost recovery methods in 1993 and 1994 in rural Niger provided strong evidence that some form of social financing or risk-sharing mechanism may have advantages over pure fee-for-service methods in rural Africa. The main reason user fees are believed to be inequitable is that new or increased prices may provide a stronger disincentive to the poor than to the better-off. Informal means testing in Niger suggested that even moderately effective means testing can play a positive role for other incentives to utilization by the poor. A study identified specific measures of structure, process, and outcomes to assess quality improvement in 18 rural primary health care facilities involved in the Niger cost recovery pilot tests. Reallocation of existing resources to improve cost-effectiveness represents the second principle type of health financing reform. Private providers also play a role in promoting access in Sub-Saharan countries. Public and private sector efficiency in Senegal was also examined. Household spending to promote efficiency suggested that people could allocate money for health care more efficiently. Finally, some policy research needs were identified.     

Health for some? The effects of user fees in the Volta Region of Ghana

This paper reports key findings and conclusions from a 1996 study of user fees and exemptions in the Volta Region of Ghana. A variety of data sources and methods were used, including interviews with patients and managers, community-based focus group discussions, analysis of facility records and analyses of previous household survey data. Official fee levels and exemption categories were established in 1985. While this legislation made provision for drug fees to be 'at cost' and thus to be revised in line with inflation, other official fees have not been adjusted since 1985. In the face of declining real levels of budget allocations and decreased supplies of essential consumables from the Central medical stores, facility managers have established their own pricing and fee collection systems. This has been allowed by the Ministry of Health, but the decentralized nature of fee setting and collection practices has made it very difficult for the Ministry to monitor the effects of fees. The study found that facility managers have been very active in setting and collecting fees and using the revenues to purchase essential inputs. The level of revenues being mobilized accounts for between two-thirds and four-fifths of the non-salary operating budget of government health facilities, and virtually all of the resources for non-salary operating expenses in mission hospitals. Official exemptions are largely non-functional. Less than one in 1000 patient contacts were granted exemption in 1995. With estimates that between 15 and 30% of the population lives in poverty, the failure of exemptions to function means that fees are preventing access for the poor, or are imposing significant financial hardships on this part of the population. Health facilities in the Volta Region have achieved a kind of 'sustainable inequity', with fees enabling service provision to continue, while concurrently preventing part of the population from using these services.     

Appropriate disclosure of a diagnosis of dementia: identifying the key behaviours of 'best practice'

Background

It has been argued that quality improvements that result from user charges reduce their negative impact on utilization especially of the poor. In Uganda, because there was no concrete evidence for improvements in quality of care following the introduction of user charges, the government abolished user fees in all public health units on 1^st March 2001. This gave us the opportunity to prospectively study how different aspects of quality of care change, as a country changes its health financing options from user charges to free services, in a developing country setting. The outcome of the study may then provide insights into policy actions to maintain quality of care following removal of user fees.

Methods

A population cohort and representative health facilities were studied longitudinally over 3 years after the abolition of user fees. Quantitative and qualitative methods were used to obtain data. Parameters evaluated in relation to quality of care included availability of drugs and supplies and; health worker variables.

Results

Different quality variables assessed showed that interventions that were put in place were able to maintain, or improve the technical quality of services. There were significant increases in utilization of services, average drug quantities and stock out days improved, and communities reported health workers to be hardworking, good and dedicated to their work to mention but a few. Communities were more appreciative of the services, though expectations were lower. However, health workers felt they were not adequately motivated given the increased workload.

Conclusion

The levels of technical quality of care attained in a system with user fees can be maintained, or even improved without the fees through adoption of basic, sustainable system modifications that are within the reach of developing countries. However, a trade-off between residual perceptions of reduced service quality, and the welfare gains from removal of user fees should guide such a policy change.     

Removal of user fees for caesareans and under‐fives in northern Sudan: a review of policy implementation and effectiveness

In 2008, the Government of Sudan launched a policy of free curative care for under‐fives and caesareans. This paper presents the findings of a review of this policy, on the basis of research conducted in five focal states of northern Sudan in 2010. Policy implementation was assessed using four research tools: key informant interviews, exit interviews, a facility survey, and analysis of facility finances and the cost of the package of care. The findings point to important weaknesses in implementation, such as unclear specification of the exact target group and package of care and inadequate funding. Despite this, service utilisation appears to have responded, at least in the short term. The findings also highlight the urgent need for improved access to basic health care and financial protection against health care costs in northern Sudan (for those with and without national health insurance membership). This review contributes to the growing literature on the selective removal of user fees for priority services. It indicates the range of challenges to effective implementation (strategic, financial and organisational). Some of these are particular to Sudan, but many are shared, and indicate important lessons for improving access to and quality of care for women and children in Africa. Copyright © 2012 John Wiley & Sons, Ltd.     

Quality of care and the demand for health services in Bamako,Mali: the specific roles of structural,process, and outcome components

The public finance and foreign exchange crisis of the 1980s aggravated the unfavourable economic trends in many developing countries and resulted in budget cuts in the health sector. Policymakers, following the suggestions of World Bank experts, introduced user fees. Economic analysis of the demand for health care in these countries focused on the impact of price and income on health service utilisation. But the lesson to date from experiences in cost recovery is that without visible and fairly immediate improvements in the quality of care, the implementation of user fees will cause service utilisation to drop. For this reason, the role of quality of health care has been recently a subject of investigation in a number of health care demand studies. In spite of using the data from both households and facilities, recent studies are quite limited because they measure quality only by structural attributes (availability of drugs, equipment, number and qualifications of staff, and so on). Structural attributes of quality are necessary but not sufficient conditions for demand. A unique feature of this study is that it also considers the processes followed by practitioners and the outcome of care, to determine simultaneously the respective influence of price and quality on decision making. A nested multinomial logit was used to examine the choice between six alternatives (self-treatment, modern treatment at home, public hospital, public dispensary, for-profit facility and non-profit facility). The estimations are based on data from a statistically representative sample of 1104 patients from 1191 households and the data from a stratified random sample of 42 out of 84 facilities identified. The results indicate that omitting the process quality variables from the demand model produces a bias not only in the estimated coefficient of the "price" variable but also in coefficients of some structural attributes of the quality. The simulations suggest that price has a minor effect on utilisation of health services, and that health authorities can simultaneously double user fees and increase utilisation by emphasising improvement of both the structural and process quality of care in public health facilities.     

The cost and efficiency of public and private health care facilities in Ogun state,Nigeria

During the 1980s, Nigeria faced difficult economic conditions resulting in a severely constrained budget for public health services. To assess more carefully the costs and efficiency of the public and private health sectors, the Federal Ministry of Health in Nigeria undertook a comprehensive survey of health care facilities in Ogun State in 1987, the analysis of which is presented in this study. The findings suggest that there is potential to increase service delivery within existing budgets by more cost-effective allocation of inputs. Many public and private providers are not operating at full technical capacity. It also appears that public facilities are not using cost-minimizing combinations of high and low-level health workers, in particular, too many low-level staff are being used to support high-level workers. The cost analysis indicates that there are short-run increasing returns to scale for inpatient and nearly constant returns to scale for outpatient services. Economies of scope for joint production of inpatient and outpatient services are not being realized. A major implication of such analysis is that improved resource allocation decisions heavily depend on the existence of information systems at the health facility level which carefully integrate financial information with other appropriate and adequate measures of service inputs, health care quality, facility utilization and ultimately health status.     

To Retain or Remove User Fees?

Many low- and middle-income countries continue to search for better ways of financing their health systems. Common to many of these systems are problems of inadequate resource mobilisation, as well as inefficient and inequitable use of existing resources. The poor and other vulnerable groups who need healthcare the most are also the most affected by these shortcomings. In particular, these groups have a high reliance on user fees and other out-of-pocket expenditures on health which are both impoverishing and provide a financial barrier to care. It is within this context, and in light of recent policy initiatives on user fee removal, that a debate on the role of user fees in health financing systems has recently returned. This paper provides some reflections on the recent user fees debate, drawing from the evidence presented and subsequent discussions at a recent UNICEF consultation on user fees in the health sector, and relates the debate to the wider issue of access to adequate healthcare. It is argued that, from the wealth of evidence on user fees and other health system reforms, a broad consensus is emerging. First, user fees are an important barrier to accessing health services, especially for poor people. They also negatively impact on adherence to long-term expensive treatments. However, this is offset to some extent by potentially positive impacts on quality. Secondly, user fees are not the only barrier that the poor face. As well as other cost barriers, a number of quality, information and cultural barriers must also be overcome before the poor can access adequate health services. Thirdly, initial evidence on fee abolition in Uganda suggests that this policy has improved access to outpatient services for the poor. For this to be sustainable and effective in reaching the poor, fee removal needs to be part of a broader package of reforms that includes increased budgets to offset lost fee revenue (as was the case in Uganda). Fourthly, implementation matters: if fees are to be abolished, this needs clear communication with a broad stakeholder buy-in, careful monitoring to ensure that official fees are not replaced by informal fees, and appropriate management of the alternative financing mechanisms that are replacing user fees. Fifthly, context is crucial. For instance, immediate fee removal in Cambodia would be inappropriate, given that fees replaced irregular and often high informal fees. In this context, equity funds and eventual expansion of health insurance are perhaps more viable policy options. Conversely, in countries where user fees have had significant adverse effects on access and generated only limited benefits, fee abolition is probably a more attractive policy option. Removing user fees has the potential to improve access to health services, especially for the poor, but it is not appropriate in all contexts. Analysis should move on from broad evaluations of user fees towards exploring how best to dismantle the multiple barriers to access in specific contexts.     

Quality improvement and its impact on the use and equality of outpatient health services in India

This paper examines the impact of quality improvements in conjunction with user fees on the utilization and equality of outpatient services at a range of public sector health facilities in India. Project impact on outpatient visits was estimated via the difference-in-difference method using pooled time series visit data from project and control facilities. The results indicate that the quality improvements significantly increased visits at all facility types. The project effect was largest at primary health center (PHC) and community health center (CHC), followed by district hospital (DH) and female district hospital (FDH). Pro-rich inequalities in outpatient visits increased at DHs and FDHs while at CHCs and PHCs the distribution remained equitable. This suggests that quality improvements at public sector health facilities can increase utilization of outpatient services in the presence of nominal user fees, but can also promote greater inequality favoring the better-off. At the referral hospital level, quality improvements should be made in conjuction with programs which encourage utilization by the poor. In contrast, the benefit of quality improvements at PHCs and CHCs is equitably distributed.     

Can contracted out health facilities improve access,equity, and quality of maternal and newborn health services? Evidence from Pakistan

Background

The case of contracting out government health services to non-governmental organizations (NGOs) has been weak for maternal, newborn, and child health (MNCH) services, with documented gains being mainly in curative services. We present an in-depth assessment of the comparative advantages of contracting out on MNCH access, quality, and equity, using a case study from Pakistan.

Methods

An end-line, cross-sectional assessment was conducted of government facilities contracted out to a large national NGO and government-managed centres serving as controls, in two remote rural districts of Pakistan. Contracting out was specific for augmenting MNCH services but without contractual performance incentives. A household survey, a health facility survey, and focus group discussions with client and spouses were used for assessment.

Results

Contracted out facilities had a significantly higher utilization as compared to control facilities for antenatal care, delivery, postnatal care, emergency obstetric care, and neonatal illness. Contracted facilities had comparatively better quality of MNCH services but not in all aspects. Better household practices were also seen in the district where contracting involved administrative control over outreach programs. Contracting was also faced with certain drawbacks. Facility utilization was inequitably higher amongst more educated and affluent clients. Contracted out catchments had higher out-of-pocket expenses on MNCH services, driven by steeper transport costs and user charges for additional diagnostics. Contracting out did not influence higher MNCH service coverage rates across the catchment. Physical distances, inadequate transport, and low demand for facility-based care in non-emergency settings were key client-reported barriers.

Conclusion

Contracting out MNCH services at government health facilities can improve facility utilization and bring some improvement in  quality of services. However, contracting out of health facilities is insufficient to increase service access across the catchment in remote rural contexts and requires accompanying measures for demand enhancement, transportation access, and targeting of the more disadvantaged clientele.

     

Using willingness to pay to investigate regressiveness of user fees in health facilities in Tanzania

The study uses data from the Tanzania Human Resources Development Survey (1994) on willingness to pay (WTP) for desired quality of health care at lower-level health facilities to assess potential regressiveness of user fees - a disproportionately higher negative effect of user fees on utilization of health services among the poor compared with the rich. Despite reports of extensive bypassing of the lower-level health facilities in Tanzania, the WTP for quality health care at these health facilities is surprisingly large. WTP was lower among the poor, female and elderly respondents. Almost one-quarter of the poorest 40% of the population was not willing to pay even when the quality of services met their expectations. The results suggest that: the utilization of health services at lower-level health facilities can be increased by improving the quality of care; and the implementation of uniform user charges in the public facilities may be regressive, adversely affecting utilization among the poor, women and the elderly. An effective system of exemptions and waivers will be required for the very poor who may not be able to pay even when quality of services is improved. The findings of the study have policy implications for the Tanzanian government's recent attempts to expand cost-sharing through community health funds at lower-level health facilities, being introduced since 1998.     

The cost of quality improvements due to integrated management of childhood illness (IMCI) in Uganda

The goal of this paper is to measure the marginal change in facility-level costs of medical care for children under five due to an increase in service quality achieved through the integrated management of childhood illness (IMCI) strategy. Since the beneficial effects of IMCI training on child health outcomes are due to IMCI's effects on service quality, costs of IMCI are regressed against measures of service quality in this paper. Our model shows that quality, as measured by a WHO-index of integrated child assessment is 44% higher in facilities with at least one health worker trained in IMCI as compared to facilities with no health workers trained in IMCI, adjusting for facility utilization as well as type of facility ownership. Our marginal analysis that tied IMCI training to quality and quality to costs shows that on the margin, investing in IMCI training at a primary facility level can yield a significant 44.3% improvement in service quality for a modest 13.5% increase in annual facility costs.     

Unofficial fees in Bangladesh: price, equity and institutional issues.

The widespread collection of unofficial fees at health facilities is a common form of rent-seeking behaviour in Bangladesh. Typically, unofficial fees come in the form of cash payments for the performance of required services, for direct purchase of drugs and medical-surgical requisites, and for service access. Using observational and interview methods, this study explores linkages between official and unofficial fees at three Bangladesh health facility levels; primary care Thana Health Complexes, secondary or district hospitals, and medical college hospitals. The study estimates payment levels for different income classes and different payor types at these facilities, thereby highlighting potential equity, price and institutional questions associated with unofficial fees. Not only does the practice have clear income and equity effects, there also appear to be direct effects upon patient satisfaction, perception of quality, and the ability to pay for health services. The article concludes with a discussion of 'rent capture' processes at Bangladesh facilities and the effect of unofficial fees in six areas of health sector reform: displaced official policies, reduced merit goods production, upward income redistribution, distorted human resource development, growth of facility inefficiency, and obstruction of market reforms.