A case for user charges in public hospitals

Abstract

The present decline in per capita expenditure on health in Saudi Arabia requires private funding to reduce pressure of health expenditure on the government budget. User charges would be an important source of revenue in the Kingdom where services cannot be cut and taxes are not imposed. User charges in public facilities would curtail over-utilization and reduce inefficient use of resources by providing a link between financial responsibility and the provision of services. The financial implication facing patients would encourage them to be more cost-conscience, and therefore their physicians would be encouraged to limit practices such as over prescribing drugs and the use of highly specialized diagnostic procedures for routine investigation or minor illnesses. Lack of economic incentives have led to a lack of concern for the cost of medical care. User charges would not only encourage both consumers and providers to be cost-conscious, but would raise revenue to ease pressure on the health budget, combat moral hazards and assert priorities. However, to be effective, and in order to make a serious impact on the health system, user charges must be extended to all government sectors and specialist hospitals and charges must be high enough to discourage inappropriate use of services.