3.4.4 Direct payments In the public sector, no official charges are incurred for inpatient/outpatient services. However, there are user charges only for paying wards. As a large segment of the population is not covered through prepayment insurance schemes, most private sector encounters would result in direct payments.
3.4.5 Informal payments Lewis (2006) reported that informal payments do occur to obtain admission to a hospital, obtain a bed and to receive subsidized medications. In a study conducted in Colombo involving 200 households, 61.2% of respondents said that they had used personal relationships with hospital staff to circumvent formal procedures such as reducing waiting time for consultation and procedures, while 52.0% pointed out that they had given money or gifts to hospital staff (Transparency International Sri Lanka and Friedrich Ebert Stiftung, 2009). There has not been any recent study on informal payments that patients may incur to obtain services, despite their being free.
3.5 Voluntary private health insurance 3.5.1 Private medical insurance schemes The Presidential Task Force on National Health Policy (1993) identified voluntary health insurance (VHI) as one mechanism to increase health sector financing. A report in 1997 (Rannan-Eliya, 1997) observed that: • VHI expansion would support expansion of private health services, thus reducing the demand on government sector facilities where higher-income groups could opt for private health care. • VHI was seen as a mechanism with the potential to bring in additional financial resources for the private health sector, as the public sector has limitations on charging a fee from VHI. • VHI was also expected to support increased cost recovery by MoH facilities, in particular with respect to “pay-beds” at Sri Jayewardenapura General Hospital.
3.5.2 Market role and size Although the economy has grown and the upper middle-income group has expanded, the corresponding increase in VHI is relatively small. In 1990, the VHI penetration was less than 1% of total health expenditure (THE) (RannanEliya, 1997) and in 2013 it was 2.1% of CHE (Ministry of Health and Indigenous Medicine, 2016). Withanachchi (2009) reports that in 2004, it was estimated that VHI premiums account for 4.9% of THE. As a share of private health
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