Making choices between prepayment and user charges in Zambia. What are the results for equity?

Masahide Kondo and Barbara McPake

Health Economics, 2007, vol. 16, issue 12, 1371-1387

Abstract: In many low‐income countries, user charges were introduced in the 1990s. As problems emerged of equity of access, interest grew in developing prepayment mechanisms to protect users from risk of out‐of‐pocket payments. In Zambia, a prepayment scheme did not generate sufficient revenue, due to abuses of its terms. An alternative scheme using discount cards (a set of coupons to cover episodes of care at discount) was devised. We aimed to understand the equity implications of prepayment and discount cards relative to user charges. We proposed models predicting roles of income, perceived health status, perceived quality of care and time preference in choice of payment mechanism and use of health services. We tested these models using three data sets that could be accessed or collected. It is concluded that relative to user charges, prepayment may facilitate access without incurring income‐related equity losses. Evidence concerning discount cards was weaker. We concluded that they facilitate access to a lesser extent. Discount cards offer a credible intermediate solution between user charges and prepayment that avoid some problems associated with prepayment. However, since prepayment seems to be associated with the most positive outcomes, finding other solutions to their problems would be preferred. Copyright © 2007 John Wiley & Sons, Ltd.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:16:y:2007:i:12:p:1371-1387

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