Work package 3

Cambodia – The impact of Health Equity Funds as a means of administering and financing fee waivers for the poor in public sector hospitals.


Cambodia is one of the poorest countries in Asia. Since 1990, the international community has contributed greatly to reconstruction of the public health sector. While some outstanding results have been achieved, for example control of the HIV/AIDS epidemic, many health indicators are still at unacceptable levels. Dissatisfied with their public health facilities, many Cambodian households have turned to alternative sources of care resulting in a substantial, expanding and largely unregulated private sector. Cambodia has one of the largest shares of out-of-pocket payments in health financing. There is a growing body of evidence showing illness to be one of the main causes of impoverishment.

In the nineties, as in many countries, a commitment to free public health care was withdrawn in an effort to bolster the resource-poor health sector. It was decreed that the poor should continue to be treated for free at public health facilities, but, as elsewhere, this strategy has failed to overcome barriers to access.

The intervention

Since 2000, Cambodia has pioneered a new health financing arrangement that seeks to increase funding of public health facilities while also improving access by the poor. Public hospitals are allowed to charge lump sum fees to their users but fees are waived for the poor and hospitals are compensated for these exceptions from so-called health equity funds (HEF). The HEF strategy rests on two principles: (1) a specific fund is set up to compensate selected health facilities for the services they provide to poor patients; and, (2) management of the fund is entrusted to a purchasing body that is independent of the health facility. This body is in charge of identifying eligible poor patients and covering their user fees, and possibly others costs such as transportation.

The model, characterized by individual targeting and an ear-marked budget, has been acknowledged by all stakeholders as a significant advance on previous policy that offered few incentives to treat poor patients. More than 20 health equity funds operate in Cambodia today largely supported by international donors. European bilateral aid agencies (DFID, GTZ, AFD and BTC) are particularly sympathetic to the strategy.


  1. To identify the impact of HEF on health care utilization, OOP payments and household consumption.
  2. To determine whether HEF have the intended effect of increasing access to health care by the poor in particular.
  3. To identify the characteristics of different HEF that determine their effectiveness in ensuring health care access and protecting living standards. In particular, to compare performance in urban and rural areas given that the POVILL project focused exclusively on rural areas. The funding and operation of HEF by the government, as opposed to NGOs, is currently being discussed. If this materializes, the project will take the opportunity to compare the operation and effectiveness of the government and NGO HEF.
  4. To determine whether HEF change health-seeking behavior by fostering trust in health care providers?