Cambodia is one of the poorest nations of the world and has suffered one of the most tragic histories in the latter half of the twentieth century.  It is, thus, unsurprising that Cambodia has some of the worst health outcomes in Southeast Asia (WHO Statistical Information System, accessed February 25, 2008).

  • Health Spending

Poor health outcomes are due in part to limited access to healthcare. Fewer than 60% of the poor in need of healthcare actually use it. (Cambodia Socio-Economic Survey, 2004) Nevertheless, as of 2005, Cambodia’s healthcare spending as a percentage of GDP was the highest in Southeast Asia, and the majority of that spending was out-of-pocket (Table 2). According to the 2005 DHS, the average family of five spent nearly 12% of its income on healthcare (Table 3). Using data from the 1998 Socio-Economic Survey, the World Bank reported that average spending on health in the public sector alone was 34% of non-food consumption expenditures (47% on average in rural areas and 42% for the poorest quintile nationwide) (World Bank, 1999).

The cost of large health shocks is particularly burdensome for the poor.  An average in-patient hospital visit amounted to more than 100% of expenditures on non-food consumption for all but the richest quintile (World Bank, 1999).

Thus, health shocks often contribute substantially to indebtedness and loss of land in Cambodia. For example, a survey interviewing 72 households in which at least one member had dengue after a major outbreak in 2004 found that families spent an average of $8 if using only public facilities, $32 if using both public and private and $103 if using only private. One year later, half of the 72 households interviewed still had outstanding health-related debt with interest rates between 2.5% and 15% per month, and several families had found it necessary to sell their land to pay their debt. (Van Damme et al, 2004). Annear et al (2006) found similarly high levels of indebtedness due to medical expenses.

  • Healthcare Providers

Cambodians rely on a mix of healthcare providers: public providers, private medical healthcare providers, private drug sellers (with and without pharmaceutical training) and traditional healers.

1.3          Public Providers

Cambodia’s public health system has three basic levels of health care facilities: Provincial-level hospitals, Operational District (OD) Referral Hospitals, and community Health Centers. The highest level of public care available within a province is at the Provincial Hospital in each province. Provinces are divided into several operational districts—a division specific to the healthcare system (that is, they differ from sub-provincial political administrative districts). Each OD has one (usually small) district-level Referral Hospital and an average of eleven Health Centers.  Each Health Center, in turn, serves several villages and around 13,500 people on average.

Public facilities suffer from low utilization rates. According to 2005 DHS estimates, of those who sought treatment for illness or injury, less than a quarter went to a public health facility.  Even fewer of second and third treatments were sought at public facilities.

Typical complaints about public facilities in Cambodia include having to engage in costly and time-consuming travel to reach facilities (rather than seeking treatment nearby or even receiving home care visits from private providers), personnel absence from public health facilities, long waiting times at facilities, frequent shortages of medicines, unpredictable costs and poor health worker attitudes toward patients (for example, scolding or belittling of patients). (Collins 2000; Annear et al 2006)

1.4          Private Providers

We discuss the two major classes of private providers: private medical doctors and drug sellers (including certified pharmacists and uncertified drug sellers).  Though traditional healers and midwives also serve clients in both urban and rural areas, they are less common and are responsible for less than two percent of care sought (DHS 2005).

Private providers of varying capabilities are typically more popular than public ones, even when more expensive because they often are more attentive to clients’ needs, more available, willing to visit patients in their homes, and willing to provide more of the treatments patients prefer. They are also usually willing to extend credit of various types to clients (Collins 2000; Annear et al 2006).

Patients often prefer receiving tangible treatments—drugs, injections and IV drips, and patients prefer to have a say in the treatment they receive (Van Damme et al, 2004)—and private providers also often respond well to these customer desires.  Unfortunately, this often results in inappropriate care such as improper drug prescriptions (Fort et al, 1998) and high rates of unnecessary (and sometimes unsafe) injection (Vong et al, 2005).

1.5          Public-Private Doctors

The distinction between public and private doctors is particularly complicated as many public health practitioners boost low public-sector salaries by having a private practice on the side.  In fact, one reason that practitioners are often absent from public health facilities is that they are busy working in their private capacities (Fort et al, 1998; Collins, 2000).

Although doctors may make more money from private practice, their public-sector work is intimately tied to their private work. Working in a public facility provides practitioners with a de facto medical certification (since one must be certified to work in a public facility), a mechanism for referring patients to their private practices, access to more interesting cases, and a way to stay current on new medical practices and technologies through public sector conferences and meetings (Fort et al, 1998).

1.6          Pharmacists and Drug Sellers

In Cambodia, self-medication through purchase from local uncertified drug sellers is quite common.  Pharmacists and other drug sellers are often situated near local public markets and so are more conveniently located than most public health centers.  In addition, they are usually cheaper than a clinic and are willing to provide any medicine requested by customers.  Thus drug sellers of various types are usually the first (and often the only) place rural Cambodians seek treatment for their illnesses. (DHS 2005)

Over-dispensing of drugs—especially antibiotics—when they are not needed is common.  At the same time, the importance of a full course of treatment is not well understood by many drug sellers or their clients. Such practices promote strains of diseases that are resistant to antibiotics.  To make matters worse, fake or watered-down versions of drugs are widely available. (Kelesidis et al, 2007)

Over-prescribing and misprescribing of drugs are not unique to uncertified drug sellers. Inadequate knowledge and incentives to please customers ensure that these practices are also common among certified pharmacists and public and private physician’s alike (Chareonkul et al, 2002; Pilsczek, 1999; Fort et al, 1998).

1.7          Health Financing in Cambodia

1.7.1      User Fees and Exemptions

After independence in 1993, public health services were officially free of charge and fully subsidized by the government. In practice, however, government funding was limited and public providers regularly charged patients informal “under-the-table” fees for service. In 1996-1997, Cambodia instituted an official system of user fees to help finance public health-care and replace informal fees as part of an overhaul of the public health system.

User fees are, in theory, to be posted in locations where they are easily visible to patients. While the posting of prices is not uniform (Bloom et al, 2006), the best facilities do prominently display user fees for each type of treatment. The switch from under-the-table fees to official user fees is widely believed to have increased utilization of public facilities (as well as the cost to the government), though studies that produced these results have necessarily relied upon non-experimental methods of analysis. (Annear et al, 2006; Barber et al, 2004) The change from under-the-table payments to a system of official user-fees coincided with many other changes to health facilities’ management structures (such as “contracting”, described below), making a causal relationship difficult to establish.

User fees are low relative to the cost of private-sector care, and the public healthcare system is subsidized by funds from the Cambodian government, NGOs, and international aid organizations. A study of the Takeo Provincial Hospital between 1998 and 2002, for example, found that user fees accounted for just over 30% of hospital revenues. (Barber et al, 2004)

Ministry of Health (MoH) regulations exempt poor people from user fees. Exemption schemes are set by each operational district, so they vary substantially and studies have found exemption rates ranging from 2% to 25% of patients. (Annear et al, 2006) In practice, exemption often means that healthcare workers caring for the poor lose revenue for their facility—revenue which often determines workers’ income. As a result, the poor are often excluded from the public healthcare system, particularly from hospital services. (Annear et al, 2006; Bitran et al, 2002)

1.8          Innovations in Health Financing

As of early 2008, Cambodia was in the midst of designing a comprehensive national health financing strategy. Along the way to deciding what health financing will look like in Cambodia, the government has been testing different models—most notably, outsourcing the operation of public facilities (referred to as “contracting”), a system of free health care for the poor (called “health equity funds”) and “community-based health insurance”. Each model seeks to promote efficiency, equitable access to care and high-quality care. Policy-makers consider all three alternatives effective tools to meet different health financing and service delivery goals, and all three are currently components of Cambodia’s evolving national health financing strategy and social health insurance plan.

1.9          The Contracting Experiment

Between 1999 and 2003, the Cambodian government experimented with contracting public health service provision to NGOs and private firms. Districts eligible for contracting were randomly selected, though only five out of the eight selected districts received contracting bids that met technical and cost requirements. Contracting took on two forms in its experimental stage—“contracting in” and “contracting out”. “Contracting in” required contractors to work within the existing management framework of the facility (using the same staff, ordering supplies through the Ministry of Health, etc.) in addition to meeting specified service provision targets. In contrast, “contracting out” allowed contractors full freedom in management, subject only to meeting service targets.

Bloom, et al, (2006) conducted a randomized impact evaluation of the program and found that contracting generally tended to improve outcomes specifically targeted in contracts, with “contracting out” being the more successful of the two models. At the same time, subjective evaluations from patients worsened considerably.  The authors attribute this worsening to substantial reductions in treatments such as glucose drips that are popular among patients.  After 2003 contracting was expanded to more Operational Districts.

In addition to its effects on quality, contracting has implications for health financing because it changes the structure of financial management within operational districts. Bloom, et al. (2006) found that contracting out increased public health funding and decreased individuals’ out-of-pocket spending on curative (non-preventive) care. The net effect of contracting out on total healthcare spending was neutral or slightly negative.

1.10       Health Equity Funds

Health Equity Funds (HEFs) are programs (usually sponsored by international donors) that provide free or nearly-free insurance to the poor. Unlike user-fee exemption system, in which hospitals were responsible for covering costs of exempt patients, and much like health insurance, Equity Funds typically pay facilities directly for services provided to their members. Participation in a HEF is usually free, and health care services are paid in full by the Equity Fund, though some funds require a small co-payment. HEFs choose members based on need, with each fund using its own selection criteria. The emerging norm in choosing HEF members, however, is to conduct a simple baseline wealth survey to identify the poor (a process commonly referred to as “pre-identification” in Cambodia) and then post the list of proposed Equity Fund members in the village for the community to review and amend as they see fit.

Health Equity Funds were first introduced in Cambodia in 2000 by Médecins Sans Frontières to complement a new performance-based financing scheme. The HEF component of the scheme quickly became recognized in its own right as an effective way to ensure that poor people would have access to the public healthcare system (Noirhomme et al, 2007).  HEFs have become a popular solution to providing access to health services for the poorest and are quickly replacing the old user-fee exemption system in ODs throughout the country. In late 2006, there were 26 hospital-based HEFs operating in Cambodia (Noirhomme et al, 2007).

1.11       Community-Based Health Insurance (CBHI)

The term CBHI is used interchangeably with the term micro-health insurance (or health micro-insurance). A typical CBHI operates much like a traditional health insurance scheme, except that they are structured to meet the needs of a specific group of customers—usually poorer members of communities, who often receive inadequate health care. Plans are typically cheaper and simpler (e.g. the same premium is charged to all clients, straightforward rules governing what is and is not covered) than standard health insurance plans. Although it is an old concept, CBHI products are relatively new in the developing world. Coverage is still limited but is growing quickly. (Tabor, 2005; Roth, McCord and Liber, 2007)  In early 2006, five CBHI schemes were in operation in different parts of Cambodia (four of which were run by GRET), but seven more were being developed (Annear et al, 2006).