This article summarizes the findings of a research project that provides evidence of existence of
segmentation in provision and access of health care services in the urban health care market in
Tanzania. It argues on the basis of field data that segmentation arises from of the influence of
demand and supply in the health care market in an environment of widespread poverty. The
implication is that segmentation of health care delivery into a two-tier system weakens the
whole process of provision and access to health care, especially for the urban poor. It results on
one hand to a relatively better quality upper tier of care for those who can afford it and, on the
other, a lower tier of inexpensive health care services of generally inadequate and /or doubtful
quality mainly to cater for the poor. Furthermore, the evidence in this article provides some
support for a model of market segmentation involving two-way causation in which high
incidence of poverty interacts with the health care system in a process of cumulative causation.
The deregulation and liberalization of the health sector adopted in Tanzania from early 1990‘s
has brought about a dramatic shift in the system of health care delivery, from nearly exclusively
‗free‘ public provisioning towards its extensive commercialization that includes the liberalization
of private health care provision. The prevalence of commercialized health care, in this sense fee
based, requiring out- of- pocket payment in all sectors, in the context of widespread poverty,
raises concern about access by the poor to health care services. Therefore, contrary to policy
intentions, this article argues that the urban poor frequently find themselves excluded not only
from (decent) private health care, but also from access to decent public health care, given the
current subsidy structure, its use within an extensively fee-based (commercialized) health
system – in both public and private sectors – in the prevalence of widespread poverty.