Abolishing User Fee and Private Wards in Public Hospitals

The user charges or user fee whereby a patient pays a part of the total cost of the services accessed were introduced in public sector hospitals and facilities in a number of low- and middle-income countries in the late 1990s. User fees were introduced in the belief that it would reduce unwarranted visits to health facilities and ensure ­optimal utilisation of limited available resources and that the revenue generated could be utilised at the local level to improve provision of services. Ironically, the user fee was also used by governments to reduce allocation to health ­facilities. Before long it was realised that such user charges, no matter how small, not only deterred poor people from ­accessing health facilities or delaying care seeking till their condition worsened but the money generated was inconsequential in relation to the overall budget of these health facilities. A number of the low- and middle-income countries thus withdrew these charges.

The National Health Policy of India, 2002 supported the levy of user charges and the National Rural Health Mission (NRHM) focuses upon creation of financial resources which could be locally used. Many state governments have user charges for various services, with provision of exemptions for the below poverty line population and for the mother and child health services. There are limited studies in India on the effect of user fee on service utilisation especially by the poor. The evidence prior to 2005 indicates that such charges helped some underfunded facilities to improve but studies and field evidences generated ­after 2005 indicate that user charges have had a negative influence on health seeking and utilisation by the poor.