_.5-_ with. Evidence from Cote d'lvoire (Dor, Gertler and van der Gaag, 1987) shows that the poor are two-to-three times more responsive to medical care prices than the non-poor, so that if these prices are increased significantly in the public sector, a large number of poor households would move out of that sector. A great majority of households who would exit the modern health care system would probably have to rely on traditional healers for medical care. Since traditional medicine in Africa is believed to be effective in treating only a limited number of illnesses (De Jong (1989)), user fees that would recover a substantial proportion of public health expenditures would also create large inequalities in health care. Thus, given the low level of income in Sub-Saharan Africa, and the skewness in its distribution, user fees that are aimed at recovering substantial costs of medical care, are unlikely to be acceptable to governments because of their unfavorable distributional consequences.

12. Nonetheless, levels and structure of user fees that are primarily intended to rationalize patients' use of referral care, and to cross-subsidize provision of primary health seriices are urgently needed in countries where they do not already exist.<sup>4</sup> Such fees should be lower than those intended to recover costs of service delivery. They should also be restricted initially to government hospitals. If implemented according to the above p:oposal, user charges would encourage more rational use of referral services in that they would reduce patients' overuse of referral care. In other words, hospital fees would induce patients to seek treatment in hospitals when cheaper treatment in lower level, nonpaying facilities is unavailable or has proved to be ineffective. Unless hospital care is made substantially more expensive than primary care, patients would always want to use it (even for minor illnesses) because it is of higher quality. The consequence of treatment seeking behavior induced by underpricing of hospital services is overcrowding of hospitals by patients who can be successfully treated in lower level facilities. Overcrowding of health facilities is not conducive to efficiency and effectiveness in service delivery. Charging of modest user fees in hospitals, while mraintaining free services in primary health facilities would ease patients' congestion in referral facilities. Such a fee structure is consistent with the principle of equity in health service delivery, since patients who cannot afford to pay hospital fees can obtain treatment from free facilities. Also, patients who cannot be cured by treatment provided in nonpaying facilities can be referred for free or subsidized follow-up care in hospitals. However, patients would find free facilities attractive only if the services provided there are of good quality. Efforts should therefore be made to use the fiscal resources released by user fees to improve quality of service in primary health facilities, and to finance preventive services. Even though such resources in many countries would be small proportions of total budgets of ministries of health, they are likely to be substantial in relation to expenditures on primary health services. Their impact on quality of service, especially in small health units in rural or urban areas, can therefore be significant.

' Such fees already exist in a number of African countries, e.g. Zaire, Ethiopia, Ghana and Swaziland.