Are user charges efficiency- and equity-enhancing? A critical review of economic literature with particular reference to experience from developing countries
User charges have come to play a significant role in the financing and delivery of publicly provided health services in many developing countries. As a response to health care financing crises, user charges are often promoted as a way of rationalizing the use of care, raising revenue, and improving the coverage and quality of services. The primary purpose of this paper is to provide a critical review of the main arguments for the efficiency- and equity-enhancing potential of user charges. The extent and scope of welfare gains from user charges are found to be very limited in practice. Using a less restrictive theoretical choice model and estimation technique, the most recent demand studies' findings indicate that household's utilization of health services are more responsive to changes in price and income than was initially reported by the early demand studies. Response to price changes are also found to be greater among the poor than the rich. These findings, combined with modest retained fee revenues and the failure of exemption mechanisms to protect the poor tend to cast doubt on the net benefits of user charges policy, particularly in the area of equity. Copyright © 2001 John Wiley & Sons, Ltd.
Volume (Year): 13 (2001)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/journal/5102/home|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mbugua, J. Karanja & Bloom, Gerald H. & Segall, Malcolm M., 1995. "Impact of user charges on vulnerable groups: The case of Kibwezi in rural Kenya," Social Science & Medicine, Elsevier, vol. 41(6), pages 829-835, September.
- Yoder, Richard A., 1989. "Are people willing and able to pay for health services?," Social Science & Medicine, Elsevier, vol. 29(1), pages 35-42, January.
- Stanton, Bonita & Clemens, John, 1989. "User fees for health care in developing countries: A case study of Bangladesh," Social Science & Medicine, Elsevier, vol. 29(10), pages 1199-1205, January.
- Bolduc, Denis & Lacroix, Guy & Muller, Christophe, 1996.
"The choice of medical providers in rural Benin: A comparison of discrete choice models,"
Journal of Health Economics,
Elsevier, vol. 15(4), pages 477-498, August.
- BOLDUC, Denis & LACROIX, Guy & MULLER, Christophe, 1994. "The Choice of Medical Providers in Rural Bénin: a Comparison of Discrete Choice Model," Cahiers de recherche 9411, Université Laval - Département d'économique.
- Litvack, Jennie I. & Bodart, Claude, 1993. "User fees plus quality equals improved access to health care: Results of a field experiment in Cameroon," Social Science & Medicine, Elsevier, vol. 37(3), pages 369-383, August.
- Develay, A. & Sauerborn, R. & Diesfeld, H. J., 1996. "Utilization of health care in an African urban area: Results from a household survey in Ouagadougou, Burkina-Faso," Social Science & Medicine, Elsevier, vol. 43(11), pages 1611-1619, December.
- Akin, John S. & Griffin, Charles C. & Guilkey, David K. & Popkin, Barry M., 1986. "The demand for adult outpatient services in the Bicol region of the Philippines," Social Science & Medicine, Elsevier, vol. 22(3), pages 321-328, January.
- Thomason, Jane & Mulou, Navy & Bass, Caroline, 1994. "User charges for rural health services in Papua New Guinea," Social Science & Medicine, Elsevier, vol. 39(8), pages 1105-1115, October.
- 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.
- Gertler, Paul & Locay, Luis & Sanderson, Warren, 1987.
"Are user fees regressive? : The welfare implications of health care financing proposals in Peru,"
Journal of Econometrics,
Elsevier, vol. 36(1-2), pages 67-88.
- Paul J. Gertler & Luis Locay & Warren C. Sanderson, 1987. "Are User Fees Regressive? The Welfare Implications of Health Care Financing Proposals in Peru," NBER Working Papers 2299, National Bureau of Economic Research, Inc.
- Gilson, Lucy, 1995. "Management and health care reform in sub-Saharan Africa," Social Science & Medicine, Elsevier, vol. 40(5), pages 695-710, March.
- Lavy, V. & Quigley, J.M., 1993. "Willingness to Pay for the Quality and Intensity of Midical Care; Low- Income Households in Ghana," Papers 94, World Bank - Living Standards Measurement.
- McPake, Barbara & Hanson, Kara & Mills, Anne, 1993. "Community financing of health care in Africa: An evaluation of the Bamako initiative," Social Science & Medicine, Elsevier, vol. 36(11), pages 1383-1395, June.
- Mwabu, Germano M., 1986. "Health care decisions at the household level: Results of a rural health survey in Kenya," Social Science & Medicine, Elsevier, vol. 22(3), pages 315-319, January.
- Coreil, Jeannine, 1983. "Allocation of family resources for health care in rural Haiti," Social Science & Medicine, Elsevier, vol. 17(11), pages 709-719, January.
- Musgrove, Philip, 1986. "What should consumers in poor countries pay for publicly-provided health services?," Social Science & Medicine, Elsevier, vol. 22(3), pages 329-333, January.
- Heller, Peter S., 1982. "A model of the demand for medical and health services in Peninsular Malaysia," Social Science & Medicine, Elsevier, vol. 16(3), pages 267-284, January.
- Mwabu, Germano, 1990. "Financing health services in Africa : an assessment of alternative approaches," Policy Research Working Paper Series 457, The World Bank.
- Parker, Robert L., 1986. "Health care expenditures in a rural Indian community," Social Science & Medicine, Elsevier, vol. 22(1), pages 23-27, January.
- Akin, John S, et al, 1986. "The Demand for Primary Health Care Services in the Bicol Region of the Philippines," Economic Development and Cultural Change, University of Chicago Press, vol. 34(4), pages 755-782, July.
- Germano Mwabu & Martha Ainsworth & Andrew Nyamete, 1993. "Quality of Medical Care and Choice of Medical Treatment in Kenya: An Empirical Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 28(4), pages 838-862.
- Yoon, Soon Young, 1983. "A legacy without heirs: Korean indigenous medicine and primary health care," Social Science & Medicine, Elsevier, vol. 17(19), pages 1467-1476, January.
- Mwabu, G, 1997. "User Charges for Health Care : A Review of the Underlying Theory and Assumptions," Research Paper 127, World Institute for Development Economics Research.
- Vogel, R.J., 1988. "Cost Recovery In The Health Care Sector - Selected Country Studies In West Africa," Papers 82, World Bank - Technical Papers.
- Chernichovsky, Dov & Meesook, Oey Astra, 1986. "Utilization of health services in Indonesia," Social Science & Medicine, Elsevier, vol. 23(6), pages 611-620, January.
- Dor, A. & Van Der Gaag, J., 1988. "The Demand For Medical Care In Developing Countries," Papers 35, World Bank - Living Standards Measurement.
- Mills, Anne, 1991. "Exempting the poor: The experience of Thailand," Social Science & Medicine, Elsevier, vol. 33(11), pages 1241-1252, January.
- Mwabu, Germano M. & Mwangi, Wilfred M., 1986. "Health care financing in Kenya: A simulation of welfare effects of user fees," Social Science & Medicine, Elsevier, vol. 22(7), pages 763-767, January.
- Reich, Michael R., 1995. "The politics of health sector reform in developing countries: three cases of pharmaceutical policy," Health Policy, Elsevier, vol. 32(1-3), pages 47-77.
- Lewis, Maureen A. & Parker, Clover, 1991. "Policy and implementation of user fees in Jamaican public hospitals," Health Policy, Elsevier, vol. 18(1), pages 57-85, June.
- McPake, Barbara, 1993. "User charges for health services in developing countries: A review of the economic literature," Social Science & Medicine, Elsevier, vol. 36(11), pages 1397-1405, June.
- Huber, Joyce H., 1993. "Ensuring access to health care with the introduction of user fees: A Kenyan example," Social Science & Medicine, Elsevier, vol. 36(4), pages 485-494, February.
When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:13:y:2001:i:2:p:183-209. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.