Recovery of recurrent health service costs through provincial health funds in Cameroon

This article describes the Provincial Health Funds pioneered in two Provinces of Cameroon. These funds are non-profit associations and financed by the community through drug fees and--to a lesser extent--through fees for services. The financial objective of the Funds is the full coverage of both the costs of the drug supply and the recurrent non-salary costs of the entire public health services in the province. In addition the funds are channels for community participation in the management and improvement of health services. Following a discussion of the institutional and legal framework, the paper examines the cost recovery targets and the mark-up necessary to achieve them. Comparison is made with mark-up and prices of private for-profit pharmacies. In its third year of operation, the Fund currently covers 62% of recurrent health service costs, up from 22% in the first year. With increasing number of health centers joining the fund full coverage of recurrent costs is projected to occur at the earlies in year four of operations. The authors argue that the appropriate role of donor assistance is not only to finance investment but also to subsidize recurrent costs, until the fund has reached its optimal anticipated size, thus realizing economies of scale. While the final word on sustainability can only be said years after the funds have reached their final size, the consistent trend towards full cost recovery is encouraging.