The effects of different kinds of user fee on prescribing costs in rural Nepal

(1) To estimate the cost of irrational prescribing, and (2) to compare the effect of three different kinds of user fee on prescribing costs, in rural Nepal.

A controlled before-after study was conducted in 33 government primary health care facilities in rural eastern Nepal during 1992-95. A fee per prescription (covering all drugs in whatever amounts) was regarded as the control against which two types of fee per drug item (covering a full course of treatment for each item) were compared. The average total cost to the patient for two drug items was the same in all fee systems. Total cost, expected cost (according to standard treatment guidelines) and wastage costs (total minus expected cost) per prescription were calculated from an average of 400 prescribing episodes per facility per year. The proportion of prescriptions conforming to standard treatment guidelines was calculated from 30 prescriptions per facility per year.

20-52% of total drug costs were due to inappropriate drug prescription. A fee per drug item, as compared with a fee per prescription, was associated with (1) significantly fewer drug items prescribed per patient, (2) significantly lower drug costs per prescription, (3) significantly lower wastage due to inappropriate drug prescription, and (4) a significantly greater proportion of prescriptions conforming to standard treatment guidelines. Average drug cost per prescription (which was 24-33 Nepali rupees [NRs] across districts and time) was 5.7 NRs (95% confidence interval 1.0 to 10.4) and 9.3 NRs (95% confidence interval 4.8 to 13.8) less with the two different item fees, respectively, than with the fee per prescription.

The economic consequences of irrational prescribing are severe, particularly in association with charging a fee per prescription. Item fees in the public sector reduce irrational prescribing and associated costs.