Abolition of User fee in Nepal – Can it be sustained? (Experience from a low income country)

Presenter: Badri Pande, Nepal Health Economics Association

Abstract

Following a decade long bloody insurgency during mid 1990s and 2000s in Nepal, a low income country, the people revolted against monarchy and the country was declared a republic on 28 May 2008. During the decade, there had been rapid socio-economic and political awareness with increased assertion of right by the people. The paper discusses past efforts for delivering equitable health care with quality assurance, gender sensitivity etc. during successive national health plans in line with Alma-Ata declaration, which resulted in remarkable improvement in health indicators at national level (Demographic Health Survey 2006). However, inequity and unfairness in financing with evidence of economic inequality prevailed.

In cognizance of this situation, the Ministry of Health and Population (2006), committed to provide services to ensure citizen's right to health and initiated free health service policy targeting the poor, vulnerable and marginalized people to increase their access to provide essential health care services (emergency and in-patient services only) up to 25 bedded district hospitals. The following year, user fee was abolished at all health posts and sub-health posts- the lowest echelon at village irrespective of economic status. Further, free outpatients service to targeted group was announced in district hospitals with less than 25 beds and Primary Health Care Centres of 35 districts including those with low human development index (HDI). These events took place in such rapid succession that identification of the poor, additional resource need, monitoring are main challenges.

The paper will also discuss how in the past, user fee had been imposed in all health facilities with provision of waiver and exemption to the poor. The Public Health Facility Efficiency Survey (2004) reported that the income accrued from the user fees at the Sub/Health Post level was only about 5 per cent and utilization of service was poor. The findings from the EQUITAP study (in which Nepal was a participant) reporting that national policy targeting the poor through fee exemption or waiver did not encourage the poor to avail service will also be discussed.

Further the government has recently announced to make free provision of essential drugs at district hospitals and free maternity care universally at all levels. This may encourage utilization of health care by the poor to some extent, but universalization of free primary health care with the exception of immunization, contraceptives and other public health goods is yet to be accomplished. This would require additional resource with more investment and the issue of sustainability should be considered as well. The paper will suggest measures to increase financial resources for free health care up to the district level through taxation, alternative financing, external funding, debt relief along with the issue of reallocation of available resources, shift in priority and health system strengthening based on evidence.