Impact of User Charges or Fees

Evidence of the impact of user fees on access to quality health services by the poor is mixed. While in some cases, the evidence shows that where user fees have been removed, demand for the health services by the poor increased, in some others there are reported decreases. This shows that the demand can be both price elastic as well as inelastic. Such a seemingly contradictory view needs to be examined for the differences in the methodology of studies as also for the differences in the socio-economic settings (i.e. circumstances/situations). Nonetheless, there is growing evidence that the demand for healthcare is more price-responsive among the poor. This underscores the need to find well-functioning waiver systems for better targeting of subsidies to the poor. There is also evidence that implementation of user fees can lead to quality improvements, but such a link is not automatic and needs careful design and implementation.

As low-income countries emerge from poverty, they move toward greater public financing of healthcare and universal coverage. This would be done either through the establishment of national health service systems or through social health insurance systems. At such a stage, policies for promoting demand for preventive, primary and other health services would need to be adopted. Policies for enabling the poor’s access to medical care without jeopardising their consumption of basic goods and services would also be needed. Again at such a stage, the implementation of ‘user fees’ for achieving overall operational sustainability of health systems may become warranted. Policies for adopting user fees need to be harmonised with  ‘exemption and waiver systems’ to foster access by poor to health enhancing services and protect them from catastrophic health spending. Achieving improvement in the quality of public services, reducing waiting time, reducing the need for costly self-medication, substituting lower-priced quality public services for more expensive private care, etc., are the directions in which focused attention is needed.