Tanzania’s community health fund: prepayment as an alternative to user fees

This paper describes the aims, design, implementation, and preliminary impact of a prepayment scheme initiated by Tanzania’s Community Health Fund (CHF) as an alternative to user fees. According to the author, the prepayment scheme has produced incremental improvements in the financing and provision of health in Tanzania. These improvements were facilitated by an affordable pre-payment fee, the incentive of cost-sharing, and effective social mobilisation. However, other factors prevented wider membership of the scheme, including a lack of choice among providers, insufficient autonomy of management, and the granting of extensive exemptions by CHF.

The author concludes that, while the prepayment scheme has not had a dramatic impact on health, it should be further developed for several reasons. First, prepayment offers an alternative to imposing user charges, or out-of-pocket payments, when people are ill or injured and least able to pay. It also offers the prospect of risk pooling, cost-sharing, and community ownership and empowerment. Further benefits of such a community based system include increased capacity in the health sector in terms of risk pooling, and managing funding mechanisms and purchasing arrangements. Lastly, it can be an effective mechanism for determining exemptions because communities are familiar with households unable to pay.