A prepayment scheme for hospital care in the Masisi district in Zaire: a critical evaluation

In most developing countries, government funding allocated to the health services is not sufficient to allow these services to provide appropriate health care accessible to all. Consequently, community financing has received much more attention in recent years and innovative schemes are being explored throughout the developing world. Risk-sharing schemes, like prepayment, are interesting because of their potential redistributive effects. At the end of the eighties, a prepayment scheme for hospital care was experimented with in the Masisi health district in Eastern Zaire. In the present paper, the experiment is described in a chronological way and the results are analyzed and discussed in detail. Although this particular case-study was not successful, it yields important lessons concerning the design, implementation and evaluation of prepayment schemes for hospital health care in developing countries. More specifically, phenomena like adverse selection and moral hazard are discussed. Finally, conditions for success of similar experiments are discussed. These conditions relate mainly to the organization pattern of the district health services system. The Masisi experiment is a nice illustration of the fact that prepayment is not a 'magic bullet': the lessons drawn from it may be of relevancy to health planners intending to implement hospital prepayment schemes in similar settings.