Payments for health care and its effect on catastrophe and impoverishment: experience from the transition to Universal Coverage in Thailand

Equitable health financing was embodied in the reform strategies of Thailand's health care system when the country moved towards implementing the Universal Coverage (UC) policy in 2001. This study aimed to measure the pattern of household out-of-pocket payments for health care and to examine the financial catastrophe and impoverishment due to such payments during the transitional period (pre- and post-Universal Coverage policy implementation) in Thailand. This study used the nationally representative Socioeconomic Surveys in 2000 (pre-UC), 2002, and 2004 (post-UC), which contained data from 24747, 34758 and 34843 individual households, respectively. The proportion of out-of-pocket payments for health care as a share of household living standards among Thai households shows a decreasing pattern during the observed period. Moreover, the incidence and intensity of catastrophic payments for health care decline from the pre-UC to post-UC period. The distribution of incidence and the intensity of catastrophic payments for health care across quintiles also indicate that the lower quintile group (1st and 2nd quintiles) incurs lower catastrophic health care payments compared to the higher quintile group. The UC policy is also effective in preventing impoverishment due to out-of-pocket payments for health care since both the poverty headcount and poverty gap decline from the pre-UC to post-UC period. This study provides important evidence that the UC policy implementation is a valuable social protection and safety net strategy that contributes to the prevention of financial catastrophe and impoverishment due to out-of-pocket payments for health care. In conclusion, the UC policy in Thailand achieves one of the goals of improving the health system through equitable health care financing by reducing financial catastrophe and impoverishment due to out-of-pocket payments for health care.     

Catastrophic and poverty impacts of health payments: results from national household surveys in Thailand

OBJECTIVE: To estimate the incidence and describe the profile of catastrophic expenditures and impoverishment due to household out-of-pocket payments, comparing the periods before and after the introduction of universal health care coverage (UC). METHODS: Secondary data analyses of socioeconomic surveys on nationally representative households pre-UC in 2000 (n = 24,747) and post-UC in 2002 (n = 34,785) and 2004 (n = 34,843). FINDINGS: Households using inpatient care experienced catastrophic expenditures most often (31.0% in 2000, compared with 15.1% and 14.6% in 2002 and 2004, respectively). During the two post-UC periods, the incidence of catastrophic expenditures for inpatient services at private hospitals was 32.1% for 2002 and 27.8% for 2004. For those using inpatient care at district hospitals, the corresponding catastrophic expenditures figures were 6.5% and 7.3% in 2002 and 2004, respectively. The catastrophic expenditures incidence for outpatient services from private hospitals moved from 27.9% to 28.5% between 2002 and 2004. In 2000, before universal coverage was introduced, the percentages of Thai households who used private hospitals and faced catastrophic expenditures were 35.8% for inpatient care and 36.0% for outpatient care. Impoverishment increased for poor households because of payments for inpatient services by 84.0% in 2002, by 71.5% in 2004 and by 95.6% in 2000. The relative increase in out-of-pocket impoverishment was found in 98.8% to 100% of those who were poor following payments made to private hospitals, regardless of type of care. CONCLUSION: Households using inpatient services, especially at private hospitals, were more likely to face catastrophic expenditures and impoverishment from out-of-pocket payments. Use of services not covered by the UC benefit package and bypassing the designated providers (prohibited under the capitation contract model without proper referrals) are major causes of catastrophic expenditures and impoverishment.     

Insured yet vulnerable: out-of-pocket payments and India's poor

Protecting households from high out-of-pocket (OOP) payments for health care is an important health system goal. High OOP payments can push households into poverty and make them vulnerable to catastrophic health expenditures. This study, based in India, aims to: (a) estimate OOP payments for health and related impoverishment across economic groups; (b) decompose OOP payments and relate the contribution of their components to impoverishment; and (c) examine how well recently introduced national insurance schemes meant for the poor are able to provide financial protection. The analysis of nationally representative data from India shows that 3.5% of the population fall below the poverty line and 5% households suffer catastrophic health expenditures. The poverty deepening impact of OOP payments was at a maximum in people below the poverty line in comparison with those above (Rs. 10.45 vs. Rs. 1.50, respectively). Medicines constitute the main share (72%) of total OOP payments. This share reaches 82% for outpatient care, compared with 42% for inpatient care. Removing OOP payments for inpatient care leads to a negligible fall in the poverty headcount ratio and poverty gap. However, if OOP payments for either medicines or outpatient care are removed then only 0.5% people fall into poverty due to spending on health. These findings suggest that insurance schemes which cover only hospital expenses, like those being rolled out nationally in India, will fail to adequately protect the poor against impoverishment due to spending on health. Further, issues related to identifying the poor and their targeting also constrain the scheme's impact. A broader coverage of benefits, to include medicines and outpatient care for the poor and near poor (i.e. those just above the poverty line), is necessary to achieve significant protection from impoverishment.     

Analysis of the distributional impact of out-of-pocket health payments: evidence from a public health insurance program for the poor in Mexico

Many governments have health programs focused on improving health among the poor and these have an impact on out-of-pocket health payments made by individuals. Therefore, one of the objectives of these programs is to reach the poorest and reduce their out-of-pocket expenditure. In this paper we propose the distributional poverty impact approach to measure the poverty impact of out-of-pocket health payments of different health financing policies. This approach is comparable to the impoverishment methodology proposed by Wagstaff and van Doorslaer (2003) that compares poverty indices before and after out-of-pocket health payments. In order to escape the specification of a particular poverty index, we use the marginal dominance approach that uses non-intersecting curves and can rank poverty reducing health financing policies. We present an empirical application of the out-of-pocket health payments for an innovative social financing policy implemented in Mexico named Seguro Popular. The paper finds evidence that Seguro Popular program has a better distributional poverty impact when families face illness when compared to other poverty reducing policies. The empirical dominance approach uses data from Mexico in 2006 and considers international poverty standards of $2 per person per day.     

Catastrophic and impoverishing effects of health expenditure: new evidence from the Western Balkans

This paper investigates the effect of health-related expenditure on household welfare in Albania, Bosnia and Herzegovina, Montenegro, Serbia and Kosovo, all of which have undertaken major health sector reform. Two methodologies are used: (i) the incidence and intensity of 'catastrophic' health care expenditure, and (ii) the effect of out-of-pocket payments on poverty headcount and poverty gap measures. Data are drawn from the most recent Living Standards and Measurement Surveys, 2000-05. While our analyses are not without their limitations, and the lack of comparability across instruments precludes a direct comparison across countries, there is no doubt that health expenditure contributes substantially to the impoverishment of households-increasing the incidence of poverty and pushing poor households into deeper poverty-in each country. Both the catastrophic and the impoverishing effects of health expenditures are particularly severe in Albania and Kosovo. Transportation expenditure accounts for a large share of total health expenditures, especially in Albania and Serbia. Informal payments are substantial in all countries, and are particularly high in Albania. As countries in the sub-region continue the process of health system reform, an important policy question should be how to protect vulnerable groups from the catastrophic and impoverishing effects of health care expenditure.     

Appraising financial protection in health: the case of Tunisia

Despite the remarkable progress in expanding the coverage of social protection mechanisms in health, the Tunisian healthcare system is still largely funded through direct out-of-pocket payments. This paper seeks to assess financial protection in health in the particular policy and epidemiological transition of Tunisia using nationally representative survey data on healthcare expenditure, utilization and morbidity. The extent to which the healthcare system protects people against the financial repercussions of ill-health is assessed using the catastrophic and impoverishing payment approaches. The characteristics associated with the likelihood of vulnerability to catastrophic health expenditure (CHE) are examined using multivariate logistic regression technique. Results revealed that non-negligible proportions of the Tunisian population (ranging from 4.5 % at the conservative 40 % threshold of discretionary nonfood expenditure to 12 % at the 10 % threshold of total expenditure) incurred CHE. In terms of impoverishment, results showed that health expenditure can be held responsible for about 18 % of the rise in the poverty gap. These results appeared to be relatively higher when compared with those obtained for other countries with similar level of development. Nonetheless, although households belonging to richer quintiles reported more illness episodes and received more treatment than the poor households, the latter households were more likely to incur CHE at any threshold. Amongst the correlates of CHE, health insurance coverage was significantly related to CHE regardless of the threshold used. Some implications and policy recommendations, which might also be useful for other similar countries, are advanced to enhance the financial protection capacity of the Tunisian healthcare system.     

Disease-Specific Impoverishment Impact of Out-of-Pocket Payments for Health Care: Evidence from Rural Bangladesh

Background

Analysing disease-specific impoverishment impact of out-of-pocket (OOP) payments for health care is crucial for priority setting in any informed policy discussion. Lack of evidence, particularly in the Bangladesh context, motivates our paper.

Objective

To examine disease-specific impoverishment impact of OOP payments for health care.

Methods

The paper estimates the poverty impact of OOP payments by comparing the difference between the average level of headcount poverty and poverty gap with and without health care payments. We used primary data drawn from 3,941 households, distributed over 120 villages of seven districts in Bangladesh during August–September 2009.

Findings

We find that OOP outlays annually push 3.4 % households into poverty. The corresponding figures for those who had non-communicable diseases (NCDs), chronic illness, hospitalization and catastrophic illness were 4.61, 4.65, 14.53 and 17.33 %, respectively. Note that NCDs are the principal reason behind the latter two situations (about 88 % and 85 % of cases, respectively). Looking into individual categories of NCDs we found that major contribution to headcount impoverishment arose out of illnesses such as cholecystectomy, mental disorder, kidney disease, cancer and appendectomy. The intensity of impoverishment is the largest among the hospitalized patients, and more individually among cancer patients.

Conclusions

The poverty impact of OOP outlays for health care, in general, is quite high. However, it is especially high for NCDs, particularly for chronic NCDs and those requiring immediate surgical procedures. Hence, these illnesses should be given more priority for policy framing. In addition to suggesting some ex-ante measures (e.g. raising awareness regarding the risk factors causing NCDs), the paper argues for reforms to enhance efficiency in the public health care facilities and increasing the quality of public health care.     

Protecting households from catastrophic health spending

Many countries rely heavily on patients' out-of-pocket payments to providers to finance their health care systems. This prevents some people from seeking care and results in financial catastrophe and impoverishment for others who do obtain care. Surveys in eighty-nine countries covering 89 percent of the world's population suggest that 150 million people globally suffer financial catastrophe annually because they pay for health services. Prepayment mechanisms protect people from financial catastrophe, but there is no strong evidence that social health insurance systems offer better or worse protection than tax-based systems do.     

Can innovative health financing policies increase access to MDG-related services? Evidence from Rwanda

Ensuring financial access to health services is a critical challenge for poor countries if they are to reach the health Millennium Development Goals (MDGs). This article examines the case of Rwanda, a country which has championed innovative health care financing policies. Between 2000 and 2007, Rwanda has improved financial access for the poor, increased utilization of health services and reduced out-of-pocket payments for health care. Poor groups' utilization has increased for all health services, sometimes dramatically. Use of assisted deliveries, for example, increased from 12.1% to 42.7% among the poorest quintile; payments at the point of delivery have also been reduced; and catastrophic expenditures have declined. Part of these achievements is likely linked to innovative health financing policies, particularly the expansion of micro-insurance ('mutuelles') and performance-based financing. The paper concludes that the Rwanda experience provides a useful example of effective implementation of policies that reduce the financial barrier to health services, hereby contributing to the health MDGs. Today's main challenge is to build the sustainability of this system. Finally, the paper proposes a simple set of rigorous metrics to assess the impact of health financing policies and calls for implementing rigorous impact evaluation of health care financing policies in low-income countries.     

Catastrophic risk associated with out-of-pocket payments for long term care in Spain

ObjectivesThis study analyses the financial burden associated with the introduction of copayment for long-term care (LTC) in Spain in 2012 for dependent individuals.Material and methodsWe analyse and identify households for which the dependency-related out-of-pocket payment exceeds the defined catastrophic threshold (incidence), and the gap between the copayment and the threshold for the catastrophic copayment (intensity), for the full population sample and for subsamples based on the level of long-term care dependency and on regional characteristics (regional income and political ideology of party ruling the region).ResultsThe results obtained show there is a higher risk of impoverishment due to copayment among relatively well-off dependents, although the financial burden falls more heavily on less well-off households. Our findings also reveal interesting regional patterns of inequity in financing and access to long-term care services, which appear to be explained by an uneven development of LTC services (monetary transfers versus formal services) and varying levels of copayment across regions.ConclusionsThe new copayment for long-term care dependency in Spain is an important factor of catastrophic risk, and more attention should be addressed to policies aimed at improving the progressivity of out-of-pocket payments for LTC services within and between regions. In addition, formal services should be prioritised in all regions in order to guarantee equal access for equal need.     

Health care-seeking behaviour and out-of-pocket payments in Tbilisi, Georgia

Based on a household survey conducted in Tbilisi, Georgia, in 2000, this paper examines current patterns of health care-seeking behaviour and the extent of out-of-pocket payments. Results show that health care services are a financial burden and that private (out-of-pocket) payment creates financial barriers to accessing health services. Members of the poorest households are less likely to seek care than people from more affluent households, and devote a higher share of household monthly expenditure to health care. Households have adopted various strategies to overcome these financial barriers, but the strategies are likely to contribute to both declining economic status and worsening health outcomes. The paper provides an evidence base to help direct future policy reform in Georgia. Government needs to: (1) prioritize public financing of services for the poor, in particular through amending the Basic Benefit Package so that it better reflects the needs of the poor; (2) promote the quality and utilization of primary care services; (3) address the issue of rational drug use; and (4) consider mobilizing out-of-pocket payments on a pre-paid basis through formal or community-based risk pooling schemes.     

Impact of mutual health organizations: evidence from West Africa

Mutual health organizations (MHOs) are voluntary membership organizations providing health insurance services to their members. MHOs aim to increase access to health care by reducing out-of-pocket payments faced by households. We used multiple regression analysis of household survey data from Ghana, Mali and Senegal to investigate the determinants of enrollment in MHOs, and the impact of MHO membership on use of health care services and on out-of-pocket health care expenditures for outpatient care and hospitalization. We found strong evidence that households headed by women are more likely to enroll in MHOs than households headed by men. Education of the household head is positively associated with MHO enrollment. The evidence on the association between household economic status and MHO enrollment indicates that individuals from the richest quintiles are more likely to be enrolled than anyone else. We did not find evidence that individuals from the poorest quintiles tend to be excluded from MHOs. MHO members are more likely to seek formal health care in Ghana and Mali, although this result was not confirmed in Senegal. While our evidence on whether MHO membership is associated with higher probability of hospitalization is inconclusive, we find that MHO membership offers protection against the potentially catastrophic expenditures related to hospitalization. However, MHO membership does not appear to have a significant effect on out-of-pocket expenditures for curative outpatient care.     

An analysis of equity in Brazilian health system financing

Health care in Brazil is financed from many sources--taxes on income, real property, sales of goods and services, and financial transactions; private insurance purchased by households and firms; and out-of-pocket payments by households. Data on household budgets and tax revenues allow the burden of each source except firms' insurance purchases for their employees to be allocated across deciles of adjusted per capita household income, indicating the progressivity or regressivity of each kind of payment. Overall, financing is approximately neutral, with progressive public finance offsetting regressive payments. This last form of finance pushes some households into poverty.     

Indian community health insurance schemes provide partial protection against catastrophic health expenditure

Background  

More than 72% of health expenditure in India is financed by individual households at the time of illness through out-of-pocket payments. This is a highly regressive way of financing health care and sometimes leads to impoverishment. Health insurance is recommended as a measure to protect households from such catastrophic health expenditure (CHE). We studied two Indian community health insurance (CHI) schemes, ACCORD and SEWA, to determine whether insured households are protected from CHE.     

The effect of wealth status on care seeking and health expenditures in Afghanistan

This paper analyses the effect of wealth status on care-seekingpatterns and health expenditures in Afghanistan, based on anational household survey conducted within public health facilitycatchment areas. We found high rates of reported care-seeking,with more than 90% of those ill seeking care. Sick individualsfrom all wealth quintiles had high rates of care-seeking, althoughthose in the wealthiest quintile were more likely to seek carethan those from the poorest (odds ratio 2.2; 95% CI 1.6, 3.0).The nearest clinic providing the government's Basic Packageof Health Services (BPHS) was the most commonly sought firstprovider (53% overall), especially for relatively poor households(62% in poorest vs. 42% in least poor quintile, P < 0.0001).Sick individuals from wealthier quintiles used hospitals andfor-profit private providers more than those in poorer quintiles.Multivariate analysis showed that wealth quintile was the strongestpredictor of seeking care, and of going first to private providers.More than 90% of those seeking care paid money out-of-pocket.Mean (median) expenditures among those paying for care in theprevious month were 873 Afghanis (200 Afghanis), equivalentto US$17.5 (US$4). Expenditures were lowest at BPHS clinicsand highest at private providers. Financing care through borrowingmoney or selling assets/land (‘any distress’ financing)was reported in nearly 30% of cases and was almost twice ashigh among households in the poorest versus the least poor quintile(P < 0.0001). Financing care through selling assets/land(‘severe distress’ financing) was less common (10%overall) and did not differ by wealth status. These findingsindicate that BPHS facilities are being used by the poor wholive close to them, but further research is needed to assessutilization among populations in more remote areas. The highout-of-pocket health expenditures, particularly for privatesector services, highlight the need to develop financial protectionmechanisms in Afghanistan.     

Catastrophe and impoverishment in paying for health care: with applications to Vietnam 1993-1998

This paper presents and compares two threshold approaches to measuring the fairness of health care payments, one requiring that payments do not exceed a pre-specified proportion of pre-payment income, the other that they do not drive households into poverty. We develop indices for 'catastrophe' that capture the intensity of catastrophe as well as its incidence and also allow the analyst to capture the degree to which catastrophic payments occur disproportionately among poor households. Measures of poverty impact capturing both intensity and incidence are also developed. The arguments and methods are empirically illustrated with data on out-of-pocket payments from Vietnam in 1993 and 1998. This is not an uninteresting application given that 80% of health spending in that country was paid out-of-pocket in 1998. We find that the incidence and intensity of 'catastrophic' payments - both in terms of pre-payment income as well as ability to pay - were reduced between 1993 and 1998, and that both incidence and intensity of 'catastrophe' became less concentrated among the poor. We also find that the incidence and intensity of the poverty impact of out-of-pocket payments diminished over the period in question. Finally, we find that the poverty impact of out-of-pocket payments is primarily due to poor people becoming even poorer rather than the non-poor being made poor, and that it was not expenses associated with inpatient care that increased poverty but rather non-hospital expenditures.     

居民个人现金卫生支出的致贫影响研究

本文通过对全国和部分省个人现金卫生支出的致贫影响研究，进一步分析卫生筹资机制对居民因病致贫的作用，以及卫生筹资在国家扶贫工作中的重要性。研究发现个人现金卫生支出是致贫的重要影响因素，而且在城乡之间、不同经济水平人群之间的致贫影响存在巨大差异。研究还发现经济的快速发展不能自发地解决贫困问题，需要制定政策进行必要的干预。     

The impact of out‐of‐pocket health expenditure on household impoverishment: Evidence from Morocco

Health financing in Morocco relies mainly on out‐of‐pocket (OoP) payments. World Health Organization (WHO) has shown that these payments can expose households to catastrophic health expenditure (hereinafter CHE) and impoverish them. The study examines the financial burden of OoP health payments on Moroccan households. Two approaches—that developed by Wagstaff and Doeslear and the one advocated by WHO—are adopted to estimate the extent of CHE. These show that 1.77% of households incurred CHE at the 40% threshold for nonfood expenditure. At the 10% threshold for total consumption expenditure, 12.8% of households incurred CHE. We find that these OoP payments have made 1.11% of Moroccan households poorer. In analyzing the determinants of CHE, we estimated an ordered probit model. It appears that any of (a) hospitalization, (b) presence of an elderly person in the household, or (c) the level of poverty increases significantly the likelihood of health expenditure becoming catastrophic. On the other hand, we find that coverage by health insurance protects against CHE.     

What are the economic consequences for households of illness and of paying for health care in low- and middle-income country contexts?

This paper presents the findings of a critical review of studies carried out in low- and middle-income countries (LMICs) focusing on the economic consequences for households of illness and health care use. These include household level impacts of direct costs (medical treatment and related financial costs), indirect costs (productive time losses resulting from illness) and subsequent household responses. It highlights that health care financing strategies that place considerable emphasis on out-of-pocket payments can impoverish households. There is growing evidence of households being pushed into poverty or forced into deeper poverty when faced with substantial medical expenses, particularly when combined with a loss of household income due to ill-health. Health sector reforms in LMICs since the late 1980s have particularly focused on promoting user fees for public sector health services and increasing the role of the private for-profit sector in health care provision. This has increasingly placed the burden of paying for health care on individuals experiencing poor health. This trend seems to continue even though some countries and international organisations are considering a shift away from their previous pro-user fee agenda. Research into alternative health care financing strategies and related mechanisms for coping with the direct and indirect costs of illness is urgently required to inform the development of appropriate social policies to improve access to essential health services and break the vicious cycle between illness and poverty.     

Catastrophic healthcare expenditure – Drivers and protection: The Portuguese case

The objective of this paper is to assess the extent of catastrophic healthcare expenditure, which can lead to impoverishment, even in a country with a National Health Service, such as Portugal. The level of catastrophic healthcare expenditure will be identified before the determinants of these catastrophic payments are analyzed. Afterwards, the effects of existing exemptions to copayments in health care use will be tested and the relationship between catastrophe and impoverishment will be discussed. Catastrophe is calculated from the Portuguese Household Budget Surveys of 2000 and 2005, and then analyzed using logistic regression models.