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AFRO-NETS> Waivers and Exemptions for Health Services in Developing Countries

Waivers and Exemptions for Health Services in Developing Countries
Ricardo Bitrán, and Ursula Giedion
Social Protection Discussion Paper Series, No.0308
The World Bank, 2003
Available online as Adobe PDF file (99 pp.) at:$FILE/0308.pdf
In response to shortages in public budgets for government health ser-
vices, many developing countries around the world have adopted formal 
or informal systems of user fees for health care. In most countries 
user fee proceeds seldom represent more than 15 percent of total 
costs in hospitals and health centers, but they tend to account for a 
significant share of the resources required to pay for non-personnel 
The problem with user fees is that the lack of provisions to confer 
partial or full waivers to the poor often results in inequity in ac-
cess to medical care. The dilemma, then, is how to make a much needed 
system of user fees compatible with the goal of preserving equitable 
access to services. Different countries have tried different ap-
proaches. Those which have carefully designed and implemented waiver 
systems (e.g., Thailand and Indonesia) have had much greater success 
in terms of benefits incidence than countries that have improvised 
such systems (Ghana, Kenya, Zimbabwe).
Key to the success of a waiver system is its financing. Systems that 
compensate providers for the revenue forgone from granting exemptions 
(Thailand, Indonesia, and Cambodia) have been more successful than 
those who expect the provider to absorb the cost of exemptions 
(Kenya). Where waiver systems exist, performance will improve with 
the timeliness of the reimbursement. Other success factors include 
the widespread dissemination of information among potential benefici-
aries about waiver availability and procedures; the awarding of fi-
nancial support to poor patients for non-fee costs of care, such as 
food and transportation (as in Cambodia); and the existence of clear 
criteria for the granting of waivers, thereby reducing confusion and 
ambiguity among those responsible for managing the system and among 
potential recipients. Those facing the task of adopting a system of 
waivers face multiple design options.
These include the following, among others: should exemptions be 
granted to whole groups or on the basis of individual targeting (the 
review finds that most systems are based on the latter)? Should waiv-
ers or exemptions be permanent or temporary? How frequently should 
eligibility be reassessed? Should waiver eligibility be determined 
ex-ante, in the household, or when individuals seek care in the fa-
cility? The review examines various approaches taken by countries, 
but assessing their relative practical merits is difficult, as the 
evidence is scattered and mixed.

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