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

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  • Xu, Ke
  • Evans, David B.
  • Kadama, Patrick
  • Nabyonga, Juliet
  • Ogwal, Peter Ogwang
  • Nabukhonzo, Pamela
  • Aguilar, Ana Mylena

Abstract

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.

Suggested Citation

  • Xu, Ke & Evans, David B. & Kadama, Patrick & Nabyonga, Juliet & Ogwal, Peter Ogwang & Nabukhonzo, Pamela & Aguilar, Ana Mylena, 2006. "Understanding the impact of eliminating user fees: Utilization and catastrophic health expenditures in Uganda," Social Science & Medicine, Elsevier, vol. 62(4), pages 866-876, February.
  • Handle: RePEc:eee:socmed:v:62:y:2006:i:4:p:866-876
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    Cited by:

    1. Xu, Ke & Ravndal, Frode & Evans, David B. & Carrin, Guy, 2009. "Assessing the reliability of household expenditure data: Results of the World Health Survey," Health Policy, Elsevier, vol. 91(3), pages 297-305, August.
    2. Georges Karna Kone & Martine Audibert & Richard Lalou & Hervé Lafarge & Jean-Yves Le Hesran, 2017. "Subsidized antimalarial drugs in Dakar (Senegal): Do the poor benefit?," Working Papers halshs-01535112, HAL.
    3. Ebaidalla Mahjoub Ebaidalla & Mohammed Elhaj Mustafa Ali, 2017. "Determinants and Impact of Households’s Out-of-Pocket Health Care Expenditure in Sudan: Evidence From Urban and Rural Population," Working Papers 1170, Economic Research Forum, revised 12 2017.
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    5. Ahmed Shoukry Rashad, 2014. "The Catastrophic Economic Consequences of Illness and their Effect on Poverty Estimates in Egypt, Jordan, and Palestine," Working Papers 842, Economic Research Forum, revised Oct 2014.
    6. Somkotra, Tewarit & Lagrada, Leizel P., 2008. "Payments for health care and its effect on catastrophe and impoverishment: Experience from the transition to Universal Coverage in Thailand," Social Science & Medicine, Elsevier, vol. 67(12), pages 2027-2035, December.
    7. Ather H. Akbari & Wimal Rankaduwa & Adiqa K. Kiani, 2009. "Demand for Public Health Care in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 48(2), pages 141-153.
    8. Steven F. Koch, 2013. "User Fee Abolition in South Africa: Re-Evaluating the Impact?," Working Papers 201331, University of Pretoria, Department of Economics.
    9. Johnson, Ari & Goss, Adeline & Beckerman, Jessica & Castro, Arachu, 2012. "Hidden costs: The direct and indirect impact of user fees on access to malaria treatment and primary care in Mali," Social Science & Medicine, Elsevier, vol. 75(10), pages 1786-1792.
    10. Lépine, A. & Lagarde, M. & Le Nestour, A., 2015. "Free primary care in Zambia: an impact evaluation using a pooled synthetic control method," Health, Econometrics and Data Group (HEDG) Working Papers 15/20, HEDG, c/o Department of Economics, University of York.
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    12. Esther Atukunda & Anne Fitzpatrick, 2015. "An Evaluation of Factors Affecting Drug Quality: Evidence from the Antimalarial Market in Uganda," Working Papers 2015_03, University of Massachusetts Boston, Economics Department.
    13. Steven F. Koch, 2012. "The Abolition of User Fees and the Demand for Health Care: Re-Evaluating the Impact," Working Papers 201219, University of Pretoria, Department of Economics.
    14. V. Ridde & I. Agier & A. Jahn & O. Mueller & J. Tiendrebéogo & M. Yé & M. De Allegri, 2015. "The impact of user fee removal policies on household out-of-pocket spending: evidence against the inverse equity hypothesis from a population based study in Burkina Faso," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(1), pages 55-64, January.
    15. Masiye, Felix & Chitah, Bona M. & McIntyre, Diane, 2010. "From targeted exemptions to user fee abolition in health care: Experience from rural Zambia," Social Science & Medicine, Elsevier, vol. 71(4), pages 743-750, August.
    16. Cleary, Susan & Birch, Steve & Chimbindi, Natsayi & Silal, Sheetal & McIntyre, Di, 2013. "Investigating the affordability of key health services in South Africa," Social Science & Medicine, Elsevier, vol. 80(C), pages 37-46.
    17. Kim, Chang-O & Joung, Won Oh, 2014. "Effect of the Crisis Assistance Program on poverty transition for seriously ill people in South Korea: A quasi-experimental study," Social Science & Medicine, Elsevier, vol. 101(C), pages 28-35.
    18. Hadley, Mary, 2011. "Does increase in utilisation rates alone indicate the success of a user fee removal policy? A qualitative case study from Zambia," Health Policy, Elsevier, vol. 103(2), pages 244-254.
    19. Arsenijevic, Jelena & Pavlova, Milena & Groot, Wim, 2013. "Measuring the catastrophic and impoverishing effect of household health care spending in Serbia," Social Science & Medicine, Elsevier, vol. 78(C), pages 17-25.
    20. Hacer Özgen Narcı & İsmet Şahin & Hasan Yıldırım, 2015. "Financial catastrophe and poverty impacts of out-of-pocket health payments in Turkey," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(3), pages 255-270, April.

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