Waivers and exemptions for health services in developing countries

The problem with user fees is that the poorest people might not be able to pay them, and so not get the health care they need. This discussion paper from the World Bank Institute’s Social Safety Net Primer series examines the policy issues around social protection in user fee systems. The authors present evidence from a number of countries that have implemented exemption or waiver systems for the poor, and discuss lessons learned and implications for best practice.

The paper includes a summary of the background issues and policy debate over user fees, the concept of equity and the rationale for waivers and exemptions. It discusses ways of identifying beneficiaries, sets out a variety of potential protection mechanisms, and examines the evidence from practice from Kenya, Cambodia, Ghana, Zimbabwe, Indonesia, Thailand and Chile. It concludes with an analysis of the performance, financing and design and implementation features of the various systems.

Important findings include:

• A wide variety of differently designed systems are in operation, but assessing their performance and relative merits is made difficult by a lack of monitoring and evaluation data.
• Coverage of the poor by waiver systems is low in the poorer countries, particularly where providers are not compensated for granting waivers, such as Kenya. Richer countries achieve higher coverage, but experience problems with waivers being claimed by ineligible patients.
• No systematic efforts have been made in the countries to assess either the administrative costs of the waiver system, or its impact on utilisation of health services or on out-of-pocket expenditure by the poor.
• The lack of clear, easily-verifiable criteria for granting waivers hampers the success of policy, and where such criteria are not revised in response to cost of living and other changes they can become inappropriate.
• In most countries featured, people are deterred from claiming waivers because they feel ashamed of admitting that they are poor.
• Where procedures are not clear and staff resources inadequate, the administration of waivers can be cumbersome, leading to delays and postponements.

An important implication of these findings is that there is a need for consistent monitoring of waiver systems, without which it is difficult to assess the relative merits of the various systems currently in operation. Nevertheless, a number of lessons for a successful waiver policy can be learned, as follows:

• Greater benefits have resulted in countries which have carefully designed and implemented waiver systems than in those which have improvised such systems
• Systems which compensate providers for revenue lost through waivers are more successful that those where the provider is expected to absorb the loss
• Where compensation systems are in place, performance improves when the reimbursement is made promptly
• Widespread dissemination of information among potential beneficiaries can improve health service utilisation levels among the poor
• Confusion and misallocation of resources can be avoided through clear and easy-to-apply criteria for eligibility