Protecting the poor

12 World Health • SOth Year, No. 5, September-October 1997

Costs should not exclude the poor from health care

William Newbrander

This family lives in a slum in Nairobi. Health programmes must balance the need to generate revenues with the need of the poor to use health seNices. Photo Still Pictures/M. Edwards ©

Campaigns ore needed to inform the public, patients and staff at health facilities about health financing mechanisms that con improve access to health core.

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any developing countries have traditionally provided health care services without charge. But decreasing government resources and increasing demand for health services over the past decade have created a need for new revenue sources to operate public health systems.

Measures to recover costs, such as user charges, have been intro- duced in many countries where they

had previously been considered unthinkable because of the prevail- ing ideology.

A variety of cost recovery sys- tems have been tried in order to replace or supplement government funds, but the impact of user fees is often ignored. Concerns about the equity of cost-sharing programmes have arisen as these schemes have become more widespread and their unintended effects have become apparent. In particular, how have cost recovery systems affected poor people's access to health care? And what mechanisms can ensure that the poor and other vulnerable groups receive care?

Protecting the poor

In many countries, these concerns have led to measures whjch exempt the poor from user charges in order to ensure that they have access to health care. Various targeting mech- anisms are used for doing this.

Targeting can be either "direct"

or "characteristic". Direct targeting means providing free or reduced- price benefits to people who cannot pay because of low income. It often uses means testing to determine how much people can afford to pay.

Characteristic targeting involves providing free or reduced-price benefits to people with certain attrib- utes regardless of income level, such as infants or the elderly, or people with certain illnesses such as tuber- culosis. These ways of targeting can be used singly or combined to work out a solution which fits the local situation.

World Health • SOth Yem, No. 5, September-October 1997

Do exemption measures work?

Exemption measures have not worked well in practice. A study conducted in five countries to deter- mine the effectiveness of exemption measures in ensuring access to health care by the poor showed that the poor often pay for health services even when they are supposed to be free. In Ecuador, for instance, public hospital services are free, but there are no supplies of drugs, so the poor have to buy these from the private sector.

There are no explicit guiding principles for cost sharing. In many cases the objectives and financial targets are not spelled out, nor is the likely impact of fees or exemptions known. Facilities in poorer areas are not compensated with additional funding. Managers and staff have no way of knowing if they are achieving the desired level of equity or not.

Realistic guidelines must be set before a policy on user charges and protection of the poor is put into practice.

Health programmes must balance the need to generate revenue with the goal of ensuring access for those who cannot pay. But hospital and health centre managers have difficulty finding an appropriate balance. In Kenya, where health staff have been taught about the need for user fee revenues, many facilities offer no waivers at all.

This approach is counterproduc- ti ve. An overemphasis on fees may lead to the abandonment of national cost-sharing schemes. On the other hand, overemphasizing free services has resulted in insufficient operating revenues at some facilities. Both problems make the user fee system difficult to operate.

Public information about waivers has also been lacking. The study showed that most patients were uninformed about eligibility for exemptions. Patients usually learned of exemptions from family, friends, or hospital staff. Campaigns are needed to inform the public, pa- tients and staff at health facilities about the reasons for cost sharing and how funds are used, and about partial and full fee exemptions.

Creative approaches

Creative exemption measures have been found in both public and pri- vate health institutions. Health managers may choose to exempt certain patients or services, or to charge below-cost fees. In some cases, they might be wise to charge very low fees for outpatient services, or to provide them without charge. It is more difficult to grant exemptions for costly inpatient services.

Other options include sliding scales for patient visits, free consul- tations, reduced fees in lower in- come areas, and reduced fees for primary care. Preventive services

could be exempted, as well as the treatment of certain illnesses, such

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as AIDS, and HIV testing. Each patient can be individually evalu- ated, and it is sometimes possible for staff to negotiate with patients to determine a feasible payment.

The basic priority is the appropri- ate financing of health systems to meet national health objectives. User fees are only one option for resolv- ing the broader issue of paying for health care. Health officials can also pursue other possibilities, such as allocating more public resources, and using existing resources more efficiently. Preventive services, for instance, can be emphasized, and waste can be reduced. Health insur- ance programmes can be used to oenerate revenue and share financial

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risks. Private sector resources can be developed and used more systemati- cally.

User fees are simply one strategy for health care financing. The provi- sion of health care should be based on need rather than ability to pay.

When this principle can be applied, policy-makers and managers are more likely to find creative solutions to the dilemma of ensuring both the quality and the accessibility of health care. •

Dr William Newbronder is Director of Management Sciences for Health, Health Financing Programme, 165 Allondole Rood, Boston, MA 02130, USA

A community health worker in Calcutta. The public need to be kept fully informed about affordable health core.

A family planning talk in a shanty town of Rio de Janeiro Creative approaches ore being used to finance health oct1v1t1es which wdl lead to improved social status. Photo Still Pictures/M. Edwards©

Photo Still Pictures/M. Edwards©