IMPROVING THE IMPLEMENTATION OF COST RECOVERY FOR HEALTH - LESSONS FROM ZIMBABWE

In the current debate over health financing policy in developing count ries, governments are increasingly focusing on cost recovery - having patients pay part or all of their health care costs - as a way to mobi lize more resources for health, improve equity by selectively charging the wealthy, and increase efficiency by encouraging reinvestment of f ee revenues into cost-effective primary care. Zimbabwe offers an impor tant example of a country with a tradition of levying fees in governme nt health facilities, but where enforcement became lax in the 1980s. I n 1991, policymakers resolved to resuscitate and strengthen cost recov ery, as part of a broader economic reform program. This paper discusse s the strengths and weaknesses of Zimbabwe's cost recovery system, its potential for improvement, and the obstacles to change in revising th e fee structure and billing and collection procedures. It argues that cost recovery can help to achieve Zimbabwe's health objectives, but on ly in conjunction with other measures to redirect public spending to e ssential public health and clinic care and improve the efficiency of g overnment services. The paper finds that during the 1980s, the fee sch edule became badly misaligned with actual medical care costs and creat ed distortions in patient referral patterns. Billing and collection we re also weak, because of deficiencies in personnel and information sys tems and lack of incentives for revenue generation. The paper conclude s that if key steps were taken to raise the collections-to-billings ra tio, recover fees from privately-insured patients, and adjust fees in line with medical cost inflation, recoveries could increase fourfold, from 5% to 20% of government spending for clinical care. At the same t ime, access to government health services for the poor could be mainta ined by improving exemption procedures.