health accounts in the tropics

In developing countries, side-payments are often necessary to secure access to services in public facilities, especially in clinics and hospitals. Dr Ravi Rannan-Eliya, a Sri Lankan public health specialist, explains the recommended treatment of these payments for National Health Accounts.

The health accountant should not confuse official fees collected on the basis of official regulations by public sector facilities with other payments incurred by patients when patronizing such facilities. Such other payments can … [include] private and informal payments made to employees … , usually for the purpose of preferentially accessing services in the public facility. ….

[T]here is no definitive statement of how such transactions should be reported in the context of the SHA [System of Health Accounts] framework. In fact, the general problem of how to report private illegal payments or bribes to public sector employees in exchange for services produced in the public sector is an issue that remains debated in the national accounts field. On this issue, national accounts experts from international agencies, such as the World Bank and IMF, have expressed the position that these transactions should be reported as private sector payments, and definitely not be treated as involving production by the public sector, nor added to estimates of public sector production.

Ravi P. Rannan-Eliya, “National Health Accounts Estimation Methods: Household Out-of-pocket Spending in Private Expenditure”, prepared for WHO, Geneva, Switzerland, January 2008, pp. 27-28.

Obtaining reliable data on these payments is definitely a challenge. Dr Rannan-Eliya recommends that health accountants “conduct a special survey of households to determine what payments are being made in association with visits to public sector facilities. This is recommended over conducting a survey of patients at the facilities or surveying the providers themselves, since in both instances cooperation or truthful responses may not be forthcoming.”

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