Global Health Watch 1 in one file

Health care systems | B1
user charges that arose from the ‘passive privatization’ of health care and the
increase in informal, under-the-counter charges in the public sector.
The impact of this transfer of responsibility for health care financing onto
households has been disastrous, particularly for the poor. It has deterred
people from accessing health care and resulted in untreated sickness and
avoidable death (Whitehead, Dahlgren and Evans 2001, Theodore 1999, World
Bank 1999, Yu, Cao and Lucas 1997 and Fu 1999). User fees have also discouraged
people from taking full doses of their medication; evidence is emerging
that they undermine adherence to anti-retroviral treatment and increase the
risk of drug resistance (WHO 2004). Even when health care is nominally free,
financial barriers may still put health care beyond the reach of many families.
Maternity services in Bangladesh, for instance, are free but in practice are
accompanied by hidden and unofficial payments; for more than one fifth of
families, these payments are the equivalent of 50–100% of their monthly income
(Nahar and Costello 1998).
User fees also generate poverty, or deepen the poverty of those who are already
poor. In rural North Vietnam, an estimated one fifth of poor households
Box B1.3 Public and private health care financing
Private financing takes many forms. Private health insurance is often paid
by individuals, but some private sector employers contribute to their employees’
private health insurance. In some places, households contribute
to a community-financing scheme, which pools funds that are managed on
behalf of all members of the scheme. User charges refer to out-of-pocket
payments that service users make directly to providers. Medical savings accounts
are promoted as a mechanism for households to build up a reserve
of money to enable them to meet the cost of user fees in the future.
Public financing is generally based on general tax revenue or national
health insurance. In developing countries, external grants and aid from
donors can constitute anything between 20% and 80% of total public sector
health care spending.
Public and private sources of financing often co-exist – for example,
community-financing schemes may complement public funds used to pay
the salaries of some health workers, while private medical insurance may
receive tax breaks that amount in practice to a public subsidy.
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