Abolition of user fees: the Uganda paradox.

Inadequate health financing is one of the major challenges health systems in low-income countries currently face. Health financing reforms are being implemented with an increasing interest in policies that abolish user fees. Data from three nationally representative surveys conducted in Uganda in 1999/2000, 2002/03 and 2005/06 were used to investigate the impact of user fee abolition on the attainment of universal coverage objectives. An increase in illness reporting was noted over the three surveys, especially among the poorer quintiles. An increase in utilization was registered in the period immediately following the abolition of user fees and was most pronounced in the poorest quintile. Overall, there was an increase in utilization in both public and private health care delivery sectors, but only at clinic and health centre level, not at hospitals. Our study shows important changes in health-care-seeking behaviour. In 2002/03, the poorest population quintile started using government health centres more often than private clinics whereas in 1999/2000 private clinics were the main source of health care. The richest quintile has increasingly used private clinics. Overall, it appears that the private sector remains a significant source of health care. Following abolition of user fees, we note an increase in the use of lower levels of care with subsequent reductions in use of hospitals. Total annual average expenditures on health per household remained fairly stable between the 1999/2000 and 2002/03 surveys. There was, however, an increase of US$21 in expenditure between the 2002/03 and 2005/06 surveys. Abolition of user fees improved access to health services and efficiency in utilization. On the negative side is the fact that financial protection is yet to be achieved. Out-of-pocket expenditure remains high and mainly affects the poorer population quintiles. A dual system seems to have emerged where wealthier population groups are switching to the private sector.