Effects of health financing mechanisms on demand for healthcare in Tanzania

The purpose of this study was to explore the impact of various mechanisms of healthcare financing on demand for healthcare and the linkage of these mechanisms to household welfare in Tanzania. The study had three specific objectives which were aimed at establishing; the impact of healthcare financing mechanisms on demand for healthcare by household in Tanzania, the impact of healthcare financing mechanisms on household welfare in Tanzania and the impact of other socio-demographic characteristics on demand for healthcare as well as on household welfare in Tanzania. The study used cross-sectional survey data which were collected as the third wave of National Panel Survey (2012/2013) by National Bureau of Statistics of Tanzania. Two probit models were developed in order to establish the effects of health financing mechanisms on demand for healthcare and on household welfare. The results for the first model show that health financing mechanisms affects significantly demand for healthcare (increases/decreases likelihood of seeking healthcare). For model two, insurance was found to be positive and significant, thus insured household were more likely to be non-poor. The study findings imply that, the government of Tanzania should widen tax base and increase capacity of collecting tax so as to be able to get enough revenue in order to provide free of charge some services which affects the wellbeing of the people directly especially healthcare services. Also formulation of proper policies especially on enrolment and payments of insurance premium will ensure that large percentage of the population is covered by these insurance schemes