Decomposing the Impact of Abolishing User Fees in Uganda

Presenter: Finn Schleimann, World Bank

Abstract

The Government of Uganda abolished user fees in public health facilities in 2001. Following this, there has been a general increase in the utilization of health facilities, both private and public. Concurrently and somewhat paradoxically, catastrophic health expenditure and the proportion of total household expenditure going to pay for health-related expenses has also been increasing in the country, both for the rich and for the poor. Given this context and the popular debate regarding the potential costs and benefits of eliminating user fees in health facilities, we examine the impact of the abolition of user fees on the unit cost of seeking health care in public facilities for all income quintiles using Uganda National Household Survey (UNHS) data from 1996, 1999, 2002, and 2006.

Given the prevalence of high drug stock out rates we analyze expenditures on drugs and medicines among those households seeking treatment in either public or private facilities. We do this to see if those households seeking treatment in public health facilities are paying less for actual visits to the clinic, but due to drug stockouts at the facility level, are having to pay for drugs in a private drug shop or other facility. This may explain why the abolition of user fees has not effectively decreased the financial burden of those seeking treatment for health related problems in Uganda. We also analyze the data by income-quintile to see if the abolition of user fees has been progressive in its results. The findings will hopefully inform policy makers on the true impact of the abolition of user fees, along with identifying potential areas to improve upon within the health system. It will also contribute to the policy debate over the progressitvity of a no-user fee policy in delivering low-cost health care to the poor.