Informal Payments
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Informal payments – charges for services or supplies that are supposed to be free – are common in many parts of the world, especially in developing and transition countries. While it is often difficult to draw a line between voluntary gifts and mandatory payment; extortion and payments that are better understood as coping mechanisms for underpaid caregivers, |
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there is little disagreement about the damaging effects of these payments on health systems worldwide. |
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Informal payments undermine the quality of health services in general, by giving doctors incentives to provide those who pay with better treatment, and effectively rendering health services and drugs unaffordable to many. They also undermine the functioning of the health care system as a whole; governments may turn a blind eye to problems caused by under-funding and poor allocation when health services seem to be operating thanks to the system of informal payments.
Recommended Readings
J.R Killingsworth, ‘Official, unofficial and informal fees for health care’
This paper deals with some of the difficult conceptual issues surrounding health sector financing payments and attempts to define terms such as ‘official’, ‘unofficial’ and ‘informal’ fees. The author establishes four negative consequences of fees outside the system, including reduced access, leakage of revenue, increased inefficiency and distorted medical practice. Killingsworth also questions what constitutes an ‘official fee’ and how it can differ in theory and practice.
Third Health Sector Development Technical Advisory Group, WHO, 2002
Maureen Lewis, ‘Who is paying for health care in Eastern Europe and central Asia?’
Maureen Lewis looks at the extent to which informal payments in the health sector in Eastern Europe and Central Asia are emerging as a fundamental component of healthcare financing and a serious impediment to healthcare reform.
The International Bank for Reconstruction and Development/The World Bank, 2000
Richard Rose, ‘Corruption is bad for your health: Findings from Central and Eastern Europe’
Rose examines the legacy of corruption left over from communist regimes and looks at the ways in which preferential treatment that was previously available to those with power or influence has become available for those who can afford to pay.
Global Corruption Report 2006, Chapter 2, p39
Wim Van Lerberghe, Claudia Conceic, Wim Van Damme, Paulo Ferrinho, ‘When staff is underpaid: dealing with the individual coping strategies of health personnel’
The authors of this report examine the ways in which health sector workers respond to inadequate salaries and poor working conditions. The paper reviews what is known about the practice of informal payments and their potential impact on service delivery. The erosion of public trust in the basic values that underpin public service is also examined. The paper asserts that a more proactive approach is required from governments in order to combat such ‘coping strategies’; and points to various ways this may be achieved.
Bulletin of the World Health Organisation, 2002
Paulo Ferrinho, Maria Carolina Omar, Maria de Jesus Fernandez, Pierre Blaise, Ana Margarida Bugalho and Wim Van Lerberghe, ‘Pilfering for survival: how health workers use access to drugs as a coping strategy’,
This paper describes widespread pilfering of drugs by health staff in Mozambique and Cape Verde as perceived by health professionals from these countries. Their opinions provide pointers as to how to tackle these problems. The study is based on a self-administered questionnaire addressed to a sample of health workers in Mozambique and in Cape Verde. The study confirms that misuse of access to pharmaceuticals has become a key element in the coping strategies health personnel develop to deal with difficult living conditions. The study finds that different professional groups (mis)use their privileged access in different ways.
Human Resources for Health, 2004
Taryn Vian, ‘Corruption and the Health Sector’, Management Systems International/USAID, Nov 2002
This work focuses on developing countries and transitional economies in which public resources are scarce and inadequate systems are crippling their growth and development. Special attention is paid to the supply of drugs and medical equipment, and to informal economic activities of health providers. These areas account for large losses in resources and have direct effects on health by reducing quality of care and access to services, especially for the poor.
Ritva Reinikka and Jakob Svensson, ‘Survey Techniques to Measure and Explain Corruption’
This survey assesses difficulties encountered in the quantitative measurement of corruption and looks at three different data collection approaches: public expenditure tracking surveys (PETS), service provider surveys and company surveys. The first section discusses the leakage of public funds and the benefits of PETS; the next section explores performance and incentive problems using service provider surveys; the final section discusses the key findings of the company-level approach focusing on incidence, levels and effects of corruption on enterprise performance.
World Bank, 2003
Sara Allin, Konstantina Davaki, Elias Mossialos, ‘Paying for ‘Free’ Healthcare: The Conundrum of Informal Payments in Post-Communist Europe’
This essay examines the nature and extent of informal payments in post-communist Europe. It looks at the role of physicians in shaping patient expectations, the impact such payments have on quality of and access to healthcare and, finally, the various policy options available to governments in their efforts to reduce corruption of this kind.
Global Corruption Report, Chapter 4, p63
Reports on specific countries
Bangladesh:
Unofficial payments co-existing with ‘free care’ in Bangladesh facilities
Killingsworth, ‘Official, Unofficial, and Informal Fees for Health Care’ Pg 5-11, Third Health Sector Development Technical Advisory Group, WHO, 2002
Eastern Europe:
Legality of fees charged in former SU countries
Killingsworth, ‘Official, Unofficial, and Informal Fees for Health Care’, Pg 11-14, Third Health Sector Development Technical Advisory Group, WHO, 2002
China:
‘Red Packet’ money in China for doctors who’s work is appreciated
Killingsworth, ‘Official, Unofficial, and Informal Fees for Health Care’, Pg 14-16, Third Health Sector Development Technical Advisory Group, WHO, 2002
Eastern Europe:
Corruption is bad for your health: findings from Central and Eastern Europe
Richard Rose, Global Corruption Report 2006, Ch2, p39
Morocco:
Informal payments take a toll on Moroccan patients
Siham Benchekroun, Global Corruption Report 2006, Ch4, p74
Hungary:
Gift, Fee or Bribe? Informal Payments in Hungary
Peter Gaal, Global Corruption Report 2006, Ch4, P71
Russia:
The Rise of Informal Payments in Russia
in Taryn Vian, ‘Corruption and the Health Sector’, Management Systems International/USAID, Nov 2002
Uganda:
McPake,B., Asiimwe, D., Mwesigye, F., Ofumbi, M., Ortemblad, L., Streefland, P &Turinde, ‘Informal economic activities of public health workers in Uganda: implication for quality and accessibility of care’, Journal of Social science and Medicine, vol.49, pp 849-865, 1999
Tools and Good Practice
Hospital waiting lists open for scrutiny in Croatia
The Croatian health ministry, with the help of TI Croatia, launched a pilot initiative to publish open waiting lists in an attempt to curb the problem of bribes paid to reduce time spent waiting for treatment. Waiting lists at two major hospitals are now available as hard copies and on the internet. This initiative has set a precedent in curbing corruption in healthcare.
Ana First, Global Corruption Report 2006,Box 3.2, p55
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