Chapter 3.3 examines informal payments. Informal payments are unsanctioned, unregulated payments made out-of-pocket by patients directly to their health care provider for services that are covered by third party purchasers. They are not recorded in routine administrative databases but can be captured in surveys, although they are usually underreported. Key learning includes that

• Informal payments (IPs) reduce access to health care and financial protection. They can undermine population health and reduce trust in providers and governments in the long run.

• IPs often stem from unmet desire for safe, timely or high-quality care and imply a mismatch between supply, demand and pricing in the formal health care payment system. When formal system payments are felt to be inadequate, IPs may also be used to express gratitude to providers.

• Settings with low physician density and / or where the share of GDP spent on health care is low, tend to have higher levels of IPs.

• IPs are also associated with settings with high reliance on formal out-of-pocket payments (user charges).

• Reducing or ending IPs is difficult and requires a combination of specific, targeted measures and broad health systems reforms that address underlying causes.

• The policy measures that may reduce IPs include

• – Formalizing out-of-pocket payments, with exemptions to protect vulnerable populations

• – Making clear and explicit what the health care benefits package covers

• – Better monitoring and enforcement of rules and penalties

• – Maintaining and expanding publicly-financed statutory coverage.