Who Benefits from Removing User Fees for Health Care? Evidence from a Randomised Experiment in Ghana

Abstract

The extent to which removing user fees for health care in developing countries improves population health rests, in part, on how behavioural responses vary across individuals with different health needs. Using data from a randomised experiment of free care in Ghana and a measure of baseline health that is both objective and broad-based, we examined differential effects for initially ill and healthy children. We find that free care improved health seeking behaviour, lowered out-of-pocket spending and reduced anaemia amongst children who were ill at baseline but had no effect on initially healthy children. Whilst there was no health effect on the intervention population taken overall, the evidence suggests that removing user fees may have enabled individuals with the greatest health need to take up primary health care, thereby improving their health. There was no indication that free care encouraged frivolous use of services.

Keywords: User Fees, Health Need, Health Insurance, Ghana

JEL Classification: I10, I18, I31, D12