Are patient charges an effective policy tool? Review of theoretical and empirical evidence

Policy-makers assign various objectives to the implementation of patient charges for public health care services. These charges impose prices on health care consumption and as such, they are expected to affect the quantities of health care service demanded, and to generate revenues. The actual ability of patient charges to achieve these objectives depends to a great extent on the patient payment mechanism implemented in a country, as well as on the health care system and context-specific factors. This paper reviews and discusses the theoretical and empirical evidence on the effectiveness of patient payment policies. The paper suggests that patient charges can be a successful policy tool for controlling the pattern of health care utilisation and improving the quality of health care provision. However, an additional condition for success is the appropriateness of the design of patient charges with respect to efficiency and equity in the public health care sector