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Community health fund put to the test
2005-05-14 08:41:26
By Sydney Kwiyamba
A project brief on the formative process research on the Local Government Reform in Tanzania has posed one question.
'Is the community health fund better than user fees for financing public health care?'
A project brief issued recently and undertaken by Deograsius Mushi on behalf of Research on Poverty Alleviation (REPOA) sheds some light on this question and other burning issues.
It is said that local institutions have huge potential for improving public health services if they could effectively manage the local delivery process, and where feasible, mobilize community contributions to complement the resource they receive from the government.
The Local Government Reform Programme (LGRP) seeks to strengthen grassroots institutions towards this endeavor.
Mushi points out that where councils have introduced fees for health service, a typical household is faced with two options to pay their medical bills, either pay an annual amount to join the Community Health Fund (CHF) for free services at public health facilities, or to pay Tshs 1,000/- for every episode of illness attended to at a public health facility.
These fee structures are still under a pilot trial, and the decision to roll them out is yet to be made.
This project brief discusses the results of an assessment of the economic costs to households in two CHF participating districts, Kilosa and Iringa Rural.
One major concern is the access by the poorest households to health services.
The researcher said a total of five hundred households were visited and interviewed in Kilosa and Iringa between October and December, 2003.
The respondent households were randomly selected from villages and wards identified on the basis of income and geographical locations so to include different socio-economic factors.
The interviews covered information on all the household members with regards to illness, health care seeking behavior and household expenditure during the last twelve months.
The survey data show that 57 per cent of household members reported at least one episode of illness during the last twelve months.
Of those, 52 per cent were over five years in age; therefore constituted as statutory payers of fees for public health care services.
The data shows that of all the households in the sample, 94% reported one to five episodes of illness during the last twelve months.
Regarding the use of payment options, CHF membership in 2003 was estimated at 24 per cent, and there is virtually no difference between poor and non-poor households.
Membership of the CHF decreazed from 32 per cent in 1999 to 24 per cent in 2003.
This reflects a drop of 8 per cent during the period, and it is worth noting that the study indicate a lower drop out rate for poor households relative to the non-poor.
The researcher then posed the following questions:
Why is membership with the CHF so low?
Is it because households prefer user fees rather than the CHF?
Why are there fewer dropouts from CHF among poor households?
lIs the CHF friendlier to the poor than the user-fee scheme?
The researcher observed that low membership rate of the CHF suggests that the fund is more expensive than the user-fee scheme.
In order to let this hypothesis, they estimated the medical bills of a household for the two payment options.
The research team started grouping all the respondent households according to the frequency of the reported illness.
Next, the team computed the mean expenditure on health care during the last twelve months but the different groups of households.
They computed what would have been the total costs on health care of the household if the payment method was exclusively user fees.
Similarly, they concluded that the total costs if they had been paying exclusively through the CHF.
Finally, a comparison between the costs rising from the two payment methods, both actual and potential was made.
This computation cum analysis showed that if all the sick had decided to consult public facilities and pay the user fee of Tsh 1,000/- per each episode of illness, they would have paid far less than the CHF annual premium of Tsh 5,000/-.
The potential user fees were less than those from the CHF membership fees for more than 94 per cent of all the households in the sample.
By implication, one saves money by opting to pay the user fee rather than the CHF premium.
The team noted that even if all the sick had decided to consult public facilities and pay the user fee, they would still have paid less than if they had joined the CHF.
However, there are other reasons why people do not join the CHF.
The major ones are lack of money, poor services and management of the CHF.
These are indications that provide further evidence that CHF is more expensive than the user fee.
The team observed that the rate of dropout for the poor is lower than that of the non-poor.
This might be explained by the fact that many poor households are big in size (67 per cent in the sample), and once they have paid the annual fee they will have less incentive to go back to paying user fees.
For obvious reasons, bigger households are likely to see a greater benefit of membership of the CHF.
It follows that small poor households have the least incentive to join the CHF.
On policy implications, the researcher has said these results of the survey suggest a need to make the CHF annual premium more affordable by lowering it.
The survey data shows that most respondents would prefer to pay between Tsh 2,000/- and 3,000/-.
The premium could be adjusted gradually to reflect a realistic rate.
This would also give people time to become accustomed to the 'pay-to-get'(user pays) health service system at village level.
The study has also shows that in addition to being expensive, membership of the CHF is discouraged by poor services and bad management.
This is a disadvantage to CHF members. Ensuring that quality of health services in primary service outlets correspondents to the level of CHF premium and therein management of the service, is strong precondition for a successful health insurance scheme at the village level.
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