User fee programmes can have positive effects, such as increasing access to essential drugs and improving rational use of drugs. But user fee programmes can also have negative effects, such as reduced access to treatment and reduced public expenditure for health.

When embarking on a new user fee programme or when making significant changes in an existing programme, it is essential that the effects of the programme be carefully monitored. The following questions should always be asked in monitoring the cost-sharing programme:

User fee monitoring questions

1. Equity effects - Are people being excluded from essential health services because of fees? Are households better off or worse off?

2. Quality impact - Is quality of service improving?

3. Revenue generation - Are cash and insurance revenues generated as expected from service volume?

4. Revenue expenditure - Are funds collected being spent as expected to improve quality of services?

5. Budget impact - Is fee revenue supplementing or substituting for central Treasury expenditures?

User fee monitoring methods

Experience from monitoring user fee programmes in Africa and Asia indicates that four types of monitoring methods should be used together: (1) field supervision, (2) routine reporting, (3) sentinel systems, and (4) special studies. Each type of monitoring provides different information and has different resource requirements.

1. Field supervision

Regular supervision at each level of the health system is necessary to effectively implement new management systems associated with user fees. It is also necessary to assess the impact of new fees. Field supervision often follows structured checklists, based on the key monitoring questions. Supervision is most cost-effective when it is targeted to districts and health facilities which are having problems (management by exception).

Supervisors should be trained how to assess collection records, dispensing records, and records of exemptions. This approach reinforces recording and report systems. It also identifies particular problems (equitable use of exemptions, for example) which may require special study. Finally, supervision provides a “reality check” on the accuracy of routine reporting data.

2. Routine reporting

Most countries have some form of Health Information System (HIS) which typically includes information on numbers of outpatient visits per month to hospitals, health centres and dispensaries. Most HIS systems also include information on inpatient admissions, occupied bed days and so forth.

For drug fees and other outpatient user fees, the most cost-effective monitoring tool is to simply plot monthly attendance, beginning several months before a fee is introduced. Figure 3 shows the graphs for two hospitals in the Region. It is clear from the graph that the first hospital experienced a mild decrease in utilization, while the second hospital experienced a severe and persistent decrease. The graph for the Township Hospital should cause policy-makers to assess the way in which user fees were implemented. Prices may be too high, the public may misunderstand the system, or exemptions may not be well-implemented for those truly unable to pay.

Figure 3. Monthly outpatient attendance at two hospitals in Myanmar, 1993-1995

In addition to health information, a user fee programme requires a Financial Information System (FIS). The FIS must be linked to a basic and transparent recording system for collections, banking, and payments. Monthly or quarterly financial reports should indicate monthly banking, monthly payments from user fee revenue, expenditure plans, cash collections, value of services provided (including waivers and exemptions), insurance and revenue (claims and payments, if applicable).

Good financial management, including a basic FIS, is vital to the sustainability of a user fee programme. Many revolving drug funds soon cease to revolve because they have not adequately monitored financial performance. The FIS should allow health providers at each level in the system to assess whether, for example, the total cash collected is sufficient to replace the drugs dispensed (see Figure 4).

Figure 4. The financing cycle for user fee programmes

3. Sentinel system

Routine reporting systems should be limited to the minimum amount of information which can be feasibly collected from all health facilities and districts. However, during the early years of a new programme, additional detailed information is often needed to assess the impact of the programme. Such information is best collected through a “sentinel system” or system of “indicator districts”.

For a sentinel system, a small number of districts (at least six) and a sample of facilities within the districts are selected for more intensive data collection. The impact of user fee programmes can best be assessed by collecting the same data with the same survey instruments and same sampling methods before and after major fee changes. Surveys should be kept very short and focused on a small number of key issues which are directly related to the major monitoring questions.

In one user fee programme, sentinel district data collection included a set of four surveys conducted before and after major fee changes:

• Rapid household survey - two-page survey of households with illness within two weeks, which included illness type and severity; source of care, costs of care, satisfaction; and patient and household characteristics.

• Patient profile - one-page - completed by clinicians, which included patient characteristics; diagnosis, prescription details, and diagnostic tests.

• Outpatient survey - two-page survey which included patients' socioeconomic characteristics; perceptions of quality; and knowledge of waivers and exemptions.

• Inpatient survey - three-page survey similar in content to the outptient survey.

Together these surveys gave a very practical picture of which groups had been affected by user fees, how they had been affected, the impact of the fees on perceived quality, knowledge of waivers, and other key issues.

4. Special studies: short, ad hoc studies

• National Hospital Insurance Fund (NHIF)

-actual vs. expected claims
-reimbursement vs. claims
-payment delays

• Outpatient exemptions

-number and value for pharmacy and laboratories
-breakdown by reason

• Inpatient collection performance

-actual vs. expected claims
-reasons for under-collection

• Primary health care expenditure

-status of PHC plans and expenditure
-reasons for not having active plans

Quality of care assessment

When assessing quality of care in a user fee programme, it should be kept in mind that patients and providers of care have different perspectives on quality of care, as shown in Table 9, below. When patients are receiving “free” care, they may be less demanding regarding quality. However, when there are user charges, patients expect that quality of care should meet their needs.

Table 9. Perspectives on quality of care

Policy issues of user fees

If user fees in government health facilities are to improve coverage and quality, then they should supplement, rather than substitute for existing financing from general revenues. In other words, user fees should be “additive” to other revenue sources. This can be assessed in three different ways:

1. Consideration of user fee revenue in budgeting process: Is user fee revenue reflected as income in official budget documents?

2. Government allocations to MOH: Are allocations to the MOH reduced or growing more slowly as a result of user fee revenue?

3. Allocations within the MOH to revenue-generating facilities: Within the Ministry, is there redistribution of central allocations from revenue-generating activities to non-revenue-generating activities?

Summary - indicators for monitoring user fee programme

In summary, to ensure that user fees achieve their intended objectives of increasing equity and quality, it is necessary to monitor their impact. A systematic low-cost monitoring plan should be developed and implemented in advance of major new fees. It is useful to think in terms of “indicators” or summary measures of impact. These may include the following:

Equity indicators:

• utilization rates (increasing or decreasing?)
• exemption rates (are the poor and other target groups protected?)
• care-seeking patterns;
• household expenditure;
• treasury allocation.

Quality indicators:

• quality inputs, drugs, etc.;
• patient perceptions.

Financial indicators:

• collections, actual vs. expected;
• revenue by source;
• revenue vs. expenditure;
• expenditure by type.