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User charges for health services in developing countries: A review of the economic literature

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  • McPake, Barbara
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    Abstract

    Literature suggests that in theory, the efficiency of user charges for health services is related to the level of externality, the price elasticity of demand, the proportion of total costs which are private access costs, and the level of the government budget constraint. Theoretical models predict that price elasticity of demand for health services is likely to be higher for lower income groups and that user charges are therefore unlikely to promote equity, or reduce the discrepancies between the utilisation rates of the rich and poor, 'ceteris paribus'. Empirical evidence tends to confirm the latter prediction but to suggest that user charges in many countries provide the scope for welfare gains for the majority. Unfortunately, this scope is seldom exploited in practice. It is argued that many countries have little choice but to try to exploit the potential for majority gains, but that more emphasis should be placed on ensuring quality improvements than on superficial financial measures of success.

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    Bibliographic Info

    Article provided by Elsevier in its journal Social Science & Medicine.

    Volume (Year): 36 (1993)
    Issue (Month): 11 (June)
    Pages: 1397-1405

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    Handle: RePEc:eee:socmed:v:36:y:1993:i:11:p:1397-1405

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    Keywords: user charges developing countries efficiency equity;

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    Cited by:
    1. Gertler, Paul J. & Hammer, Jeffrey S., 1997. "Strategies for pricing publicly provided health services," Policy Research Working Paper Series 1762, The World Bank.
    2. Gilson, Lucy & Mills, Anne, 1995. "Health sector reforms in sub-Saharan Africa: lessons of the last 10 years," Health Policy, Elsevier, vol. 32(1-3), pages 215-243.
    3. Asfaw, Abay & Braun, Joachim von & Klasen, Stephan, 2004. "How Big is the Crowding-Out Effect of User Fees in the Rural Areas of Ethiopia? Implications for Equity and Resources Mobilization," World Development, Elsevier, vol. 32(12), pages 2065-2081, December.
    4. Cisse, Boubou & Luchini, Stephane & Moatti, Jean Paul, 2007. "Progressivity and horizontal equity in health care finance and delivery: What about Africa?," Health Policy, Elsevier, vol. 80(1), pages 51-68, January.
    5. Michael Kremer & Alix Peterson Zwane, 2007. "Cost-Effective Prevention of Diarrheal Diseases: A Critical Review," Working Papers 117, Center for Global Development.
    6. Michael Kremer & Edward Miguel, 2004. "The Illusion of Sustainability," Working Papers 35, Center for Global Development.
    7. Ardeshir Sepehri & Robert Chernomas, 2001. "Are user charges efficiency- and equity-enhancing? A critical review of economic literature with particular reference to experience from developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(2), pages 183-209.
    8. Hentschel, Jesko, 1998. "Distinguishing between types of data and methods of collecting them," Policy Research Working Paper Series 1914, The World Bank.
    9. Deininger, Klaus & Mpuga, Paul, 2004. "Economic and Welfare Effects of the Abolition of Health User Fees : Evidence from Uganda," Policy Research Working Paper Series 3276, The World Bank.
    10. Michael Kremer & Edward Miguel, 2004. "The illusion of sustainability," Natural Field Experiments 00287, The Field Experiments Website.
    11. World Bank, 2004. "The Republic of Uganda : Country Integrated Fiduciary Assessment 2004, Volume 2. Public Expenditure Review 2004 - Promoting the Efficient Use of Public Resources for Poverty Eradication," World Bank Other Operational Studies 14511, The World Bank.
    12. De Allegri, Manuela & Ridde, Valéry & Louis, Valérie R. & Sarker, Malabika & Tiendrebéogo, Justin & Yé, Maurice & Müller, Olaf & Jahn, Albrecht, 2011. "Determinants of utilisation of maternal care services after the reduction of user fees: A case study from rural Burkina Faso," Health Policy, Elsevier, vol. 99(3), pages 210-218, March.
    13. Smith, Peter C., 2005. "User charges and priority setting in health care: balancing equity and efficiency," Journal of Health Economics, Elsevier, vol. 24(5), pages 1018-1029, September.
    14. World Bank, 2004. "The Republic of Uganda : Country Integrated Fiduciary Assessment 2004, Volume 1. Main Report," World Bank Other Operational Studies 15681, The World Bank.

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