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Graded user charges for hospital service improvement, Madhya Pradesh
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Subject Area="Health financing." Objective="User fees."
Details for Reform Option "Graded user charges for hospital service improvement, Madhya Pradesh"

Background: Unhygienic, dilapidated hospitals and health centres due to lack of funds. Solution: Rogi Kalyan Samitis (RKS) or Patient Welfare Committees – management groups made up of members of the state and of the community – were authorised by the state government to levy user charges for services provided and also to receive donations. They were given the ability to mobilise finances (if necessary from banks) for (i) new construction, (ii) providing modern testing facilities (eg CT scans etc.) on the hospital premises using the private sector, (iii) development of vacant land for commercial purposes. They can also recruit part-time cleaning/security staff, paramedical staff and accountants on a contract basis. They can seek exemption (for donations received and income earned) from income tax. They can incur expenditure on recurring items that are not available through the regular budget and items that are available through the regular budget but are in short supply. Their sources of finance now included revenues from income generating activities (eg cycle/ scooter stand, chemist, canteen, rents from leased out properties); loans from banks and financial institutions; loans/grants from state government and/or other agencies other than the user fees and donations they had earlier. Results: There are no figures available but the project leaders report the following: An increase in the sense of involvement of the community. An increase in the number of patients coming to government hospitals. An improvement in the efficiency of doctors and a strengthening of public institutions including a decrease in their deterioration and enhancement of their credibility.

Cost Information not available.
Place Madhya Pradesh at all levels of hospital services since 1999.
Time Frame Six to 12 months to set up the committees.

Financial sustainability: Increased.


Equality of care: Care must be taken to ensure that those who are unable to pay should still be entitled to free services.


Success of the model requires capacity building of the management bodies of RKS, a transparent system, responsiveness and communication with community.

Who needs to be consulted

State government, RKS management bodies and staff of hospitals.



Sustainable but requires close monitoring.

Chances of Replication

The model is but the process would vary from one RKS to another, thus design must address issues in process management. RKS have been formed in 43 district hospitals, 53 civil hospitals, 228 community health centres and 717 primary health centres in the state.


During the year 2003-04, the RKS collected Rs 1183.52 lakhs and spent Rs 553.69 lakhs. There have been almost no protests in the state over the introduction of user charges. Each RKS is free to use the funds as it sees fit, within certain broad guidelines.


Submitted By

Dr. S. K. Shrivastava, Member Secretary, SRB, Madhya Pradesh email July 2002.

Status Active
Reference Files
GO No F-8-1-99-17-Med2(PROD No 24).doc
Reform Ideas at Work.doc
Reference Links
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