IDEAS home Printed from https://ideas.repec.org/p/unu/wpaper/wp-1997-127.html
   My bibliography  Save this paper

User Charges for Health Care: A Review of the Underlying Theory and Assumptions

Author

Listed:
  • Germano Mwabu

Abstract

The paper reviews the theoretical basis for the application of user fees in the public health sector in low-income countries with particular reference to the special characteristics of medical care as a commodity. The general equilibrium efficiency result of the market mechanism is shown to be the theoretical justification for the financing of health services via a system of user charges. If markets for all goods and services exist, and are perfect in a very strict sense, the welfare outcome of the price mechanism cannot be improved upon by any other resource allocation device.

Suggested Citation

  • Germano Mwabu, 1997. "User Charges for Health Care: A Review of the Underlying Theory and Assumptions," WIDER Working Paper Series wp-1997-127, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-1997-127
    as

    Download full text from publisher

    File URL: https://www.wider.unu.edu/sites/default/files/WP127.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Schwartz, J Brad & Akin, John S & Popkin, Barry M, 1988. "Price and Income Elasticities of Demand for Modern Health Care: The Case of Infant Delivery in the Philippines," The World Bank Economic Review, World Bank, vol. 2(1), pages 49-76, January.
    3. Ellis, Randall P., 1987. "The revenue generating potential of user fees in Kenyan government health facilities," Social Science & Medicine, Elsevier, vol. 25(9), pages 995-1002, January.
    4. Victor R. Fuchs, 2018. "Economics, Values, and Health Care Reform," World Scientific Book Chapters, in: Health Economics and Policy Selected Writings by Victor Fuchs, chapter 39, pages 497-531, World Scientific Publishing Co. Pte. Ltd..
    5. 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.
    6. North, Douglass C, 1994. "Economic Performance through Time," American Economic Review, American Economic Association, vol. 84(3), pages 359-368, June.
    7. Annemarie Wouters, 1993. "The cost and efficiency of public and private health care facilities in Ogun state, Nigeria," Health Economics, John Wiley & Sons, Ltd., vol. 2(1), pages 31-42, April.
    8. Ellis, Randall P. & McGuire, Thomas G., 1990. "Optimal payment systems for health services," Journal of Health Economics, Elsevier, vol. 9(4), pages 375-396, December.
    9. 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.
    10. Bernheim, B Douglas, 1984. "Rationalizable Strategic Behavior," Econometrica, Econometric Society, vol. 52(4), pages 1007-1028, July.
    11. Theodore C. Bergstrom, 1996. "Economics in a Family Way," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1903-1934, December.
    12. Grytten, Jostein & Holst, Dorthe & Laake, Peter, 1990. "Supplier inducement : Its effect on dental services in Norway," Journal of Health Economics, Elsevier, vol. 9(4), pages 483-491, December.
    13. Theodore W. Schultz, 1960. "Capital Formation by Education," Journal of Political Economy, University of Chicago Press, vol. 68(6), pages 571-571.
    14. Mr. Helaway Tadesse & Mr. Günther Taube, 1996. "Presumptive Taxation in Sub-Saharan Africa: Experiences and Prospects," IMF Working Papers 1996/005, International Monetary Fund.
    15. Lant Pritchett & Lawrence H. Summers, 1996. "Wealthier is Healthier," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 841-868.
    16. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, April.
    17. Theodore C. Bergstrom, 1996. "Economics in a Family Way," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1903-1934, December.
    18. Pearce, David G, 1984. "Rationalizable Strategic Behavior and the Problem of Perfection," Econometrica, Econometric Society, vol. 52(4), pages 1029-1050, July.
    19. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
    20. 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.
    21. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
    22. Simon Appleton & John Hoddinott & John MacKinnon, 1996. "Education and health in sub-Saharan Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(3), pages 307-339.
    23. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, April.
    24. Dor, Avi & Gertler, Paul & van der Gaag, Jacques, 1987. "Non-price rationing and the choice of medical care providers in rural Cote d'Ivoire," Journal of Health Economics, Elsevier, vol. 6(4), pages 291-304, December.
    25. Akin, John S & Griffin, Charles C & Guilkey, David K & Popkin, Barry M, 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.
    26. S. R. Osmani, 1993. "Is There a Conflict between Growth and Welfarism?: The Tale of Sri Lanka," WIDER Working Paper Series wp-1993-109, World Institute for Development Economic Research (UNU-WIDER).
    27. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    28. 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.
    29. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. AfDB AfDB, 2002. "Working Paper 38 - Health Development in Africa," Working Paper Series 2256, African Development Bank.
    3. Germano Mwabu, 2002. "Working Paper 38 - Health Development in Africa," Working Paper Series 172, African Development Bank.
    4. AfDB AfDB, 2002. "Working Paper 38 - Health Development in Africa," Working Paper Series 2176, African Development Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    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. AfDB AfDB, 2002. "Working Paper 38 - Health Development in Africa," Working Paper Series 2256, African Development Bank.
    3. Magnus Lindelow, 2004. "The Utilization of Curative Health Care in Mozambique: Does Income Matter?," Development and Comp Systems 0409057, University Library of Munich, Germany.
    4. 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.
    5. AfDB AfDB, 2002. "Working Paper 38 - Health Development in Africa," Working Paper Series 2176, African Development Bank.
    6. Sisira Sarma, 2009. "Demand for outpatient healthcare," Applied Health Economics and Health Policy, Springer, vol. 7(4), pages 265-277, December.
    7. Germano Mwabu, 1996. "Health Effects of Market-Based Reforms in Developing Countries," WIDER Working Paper Series wp-1996-120, World Institute for Development Economic Research (UNU-WIDER).
    8. Lindelow, Magnus, 2002. "Health care demand in rural Mozambique," FCND discussion papers 126, International Food Policy Research Institute (IFPRI).
    9. Magnus Lindelow, 2003. "Understanding spatial variation in the utilization of health services: does quality matter?," Economics Series Working Papers WPS/2004-12, University of Oxford, Department of Economics.
    10. Christos N. Pitelis, 2011. "Foreign Direct Investment and Economic Integration," Chapters, in: Miroslav N. Jovanović (ed.), International Handbook on the Economics of Integration, Volume III, chapter 1, Edward Elgar Publishing.
    11. Pranab Bardhan, 1993. "Economics of Development and the Development of Economics," Journal of Economic Perspectives, American Economic Association, vol. 7(2), pages 129-142, Spring.
    12. Óscar D. Lourenço & Pedro L. Ferreira, 2005. "Utilization of public health centres in Portugal: effect of time costs and other determinants. Finite mixture models applied to truncated samples," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 939-953, September.
    13. Christopher J. Cronin & David K. Guilkey & Ilene S. Speizer, 2019. "Measurement error in discrete health facility choice models: An example from urban Senegal," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 34(7), pages 1102-1120, November.
    14. Bernard Paulré, 2001. "Enjeux et dilemmes de l'économie cognitive," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00135486, HAL.
    15. Dzator, Janet & Asafu-Adjaye, John, 2004. "A study of malaria care provider choice in Ghana," Health Policy, Elsevier, vol. 69(3), pages 389-401, September.
    16. Magnus Lindelow, 2004. "Understanding spatial variation in the utilization of health," Development and Comp Systems 0409058, University Library of Munich, Germany.
    17. Srivastava, Divya & McGuire, Alistair, 2015. "Patient access to health care and medicines across low-income countries," Social Science & Medicine, Elsevier, vol. 133(C), pages 21-27.
    18. Bernard Paulré, 2001. "Enjeux et dilemmes de l'économie cognitive," Working Papers halshs-00135486, HAL.
    19. Magnus Lindelow, 2003. "The Utilization of Curative Health Care in Mozambique: Does Income Matter?," Economics Series Working Papers WPS/2004-11, University of Oxford, Department of Economics.
    20. Mwabu, Germano, 2007. "Health Economics for Low-Income Countries," Center Discussion Papers 10118, Yale University, Economic Growth Center.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:wp-1997-127. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Siméon Rapin (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.