Designing better user fee systems

For the reasons discussed above, many governments are currently unable or unwilling to abolish user fees. Moreover, good design and implementation of user fees has enabled some countries to escape many of the major pitfalls. If user fees are to be kept, at least in some countries, how should they be designed?

The 1997 Addis Ababa Consensus on Principles on Cost Sharing in Education and Health in sub-Saharan Africa provides two key principles that are still relevant. First, cost sharing should only be considered after all other options have been thoroughly examined, including using revenues from taxation, and efforts to reduce costs by making services more efficient. Second, fees should be considered a stepping stone towards other financing options.

A number of practical principles also emerged from the Consensus, including:

• Selected primary services and preventive care services such as immunisation should be either free of charge or substantially subsidised, since the benefits extend beyond the individual patient.
• Resources generated through cost sharing should be additional rather than a substitute for existing resource allocations.
• Fee revenues and authority over spending decisions should be retained at the local level. To be successful and sustainable, cost sharing must lead to immediate and measurable improvements in the access and quality of services, and keeping spending power at the local level is a vital component of this.
• Cost sharing must be accompanied by special measures that effectively protect the poor. Caution must be exercised in introducing fees wherever there is doubt about the ability to protect the poor. Disadvantaged regions and communities may need extra financial support.
• Involvement of beneficiaries is critical to the success and sustainability of cost sharing. Cost sharing mechanisms should be designed in ways that incorporate community participation and control of resources. Local management committees should be locally elected and fully accountable to the community and should ensure adequate representation of all stakeholders, including a balanced gender presence.
• Cost sharing mechanisms must be regularly monitored and evaluated with a view to ensuring quick feedback on the consequences of cost sharing, particularly regarding the impact on the poor, women and children.

A common theme in the literature is that fees should be seen as part of a wider health care financing strategy, with the aim of establishing a social insurance system or other mechanisms for pooling risk, rather than as an end in themselves. The lessons of user fee experience in Africa identifies a range of recommendations both in the design of the user fee system, and in the health system more broadly. It also emphasises the need to maintain government funding for the health system as a whole, rather than using user fees as a substitute.