101. Bhat R. (2000), ‘Management Issues in the Implementation of User Fees Policy in Public Facilities’, (Draft) Indian Institute of Management (IIM), Ahmedabad.

A number of state governments in India are in the process of developing and implementing user fees policy for their public health facilities. There are other state governments which has reviewed the implementation of their existing policies. For example, the government of West Bengal, which implemented the revised rate structure of charges for hospital services in 1995, has reviewed its implementation. The government of Orissa has implemented the user fees policy at district level hospitals for diagnostic services, special rooms, and ambulance services. The government of Rajasthan created autonomous Medicare Relief Societies in each tertiary hospital and secondary hospital having 100 or more beds. One of the objectives of these societies has been to implement user fees policy for various services in these hospitals. Madhya Pradesh government has also established Rogi Kalyan Samiti (Patient Welfare Society) in the public hospitals and empowering them to generate revenue by charging user fees for the services provided and by other means thereby removing resources constraints for improving the quality of services The introduction of user fees, however, gives rise to a number of questions about the revenue generating potential of user fees in health facilities. The effective implementation of user fees policy also needs to ensure that there are effective mechanisms in place making the policies consistent with the patient's ability to pay and do not become barrier to accessing the health care facilities. There are a number of trade-offs in implementing the user fees policy and these need critical examination. This paper discusses the experiences in implementation of user fees policy in five states: West Bengal, Rajasthan, Gujarat, Madhya Pradesh and Orissa. The second section of the paper describes the macro policy context and significance of user fees policy and implications for resource mobilization and efficiency. The third section discusses the management issues in implementing the user fees policy. A detailed case study of implementation of user fees policy is presented in section four. The last section discusses the implications of this study from the viewpoint of strengthening the referral system, quality of services, and implications for developing appropriate financial management practices.