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Retention of user fees at health facilities, Punjab
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Subject Area="Health financing." Objective="User fees."
Details for Reform Option "Retention of user fees at health facilities, Punjab"

Background: The existing health facilities in Punjab were either ill maintained or ill equipped, resulting in the non-availability of services to patients. Action: Under Punjab Government notification, Punjab Health System Corporation (PHSC) has rigorously adopted user charges for various services at its health facilities. However, under the rules, the following categories of patients were exempted from paying: (i) People living below the poverty line (Yellow Card Holders) (ii) Punjab Government Employees and Pensioners (iii) Handicapped (iv) Unknown patients (v) Critically ill patients (vi) Road side accidents (vii) Under trial prisoner and convicts (vii) Freedom fighter and their family members. Under a separate notification, State Government has also allowed the PHSC to retain user charges at the point of collection and use them for non-salary and non-recurring purposes. Detailed guidelines were formulated for Civil Surgeons and Deputy Medical Commissioners on how to use the user charges collected and they were allowed to use it in high priorities under the following proportions: Drugs- 45% Improving patient facilities- 25% Maintenance of buildings- 15% Maintenance of equipment- 15% Results: Actual collection and utilisation of the user charge was as follows- Year Collection (INR in lakh) Utilisation (INR in lakh) 1996-97 INR 40.8 INR10.11 1997-98 INR 120.31 INR 72.89 1998-99 INR 201.47 INR 154.03 2002-03 INR 1070.01 INR 907.89 2003-04 INR1294.59 INR 1199.40 2004-05 INR 1482.32 INR 1268.94

Cost Only government order is required for the implementation of the user charge for various services and retention of the same at the health facilities.
Place One hundred and fifty four hospitals in Punjab, including Community Health Centres, Sub divisional hospitals and District hospitals.
Time Frame Approximate time from planning to implementing the reform is one year.

Financial sustainability: Generation of funds and their retention at the point of utilisation of services helps the health facilities to manage their resources better. Improved infrastructure and equipment: Retention of user fees allows the health facilities to repair and maintain its infrastructure and equipment. Improved drugs availability: Retention of user fees allows health facility to purchase drugs when necessary.


None perceived.


Government Orders.

Who needs to be consulted

State government.



Reform is sustainable but requires close monitoring and transparent system.

Chances of Replication

The process has been adopted by many states successfully.


Though levying user fees for the services rendered by the hospitals has grown into accepted concept among the policy makers and clients of the health facilities, but formulation of the guidelines to utilise the retained money is also equally important for patient’s welfare.


Submitted By

Dr. Anuradha Davey, Research Consultant, IRMS, September, 2005.

Status Active
Reference Files
1614496-1HB-44291(dated 12-2-1997).doc GO:20/7/89-4HBV/12402, dated 14.5.1991
20789-4HBV12402, dated(14-5-1991).doc GO:16/144/96-1HB-4/4291, dated 12.2.1997
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