A paradoxical situation in regressivity or progressivity of out of pocket payment for health care: which one is a matter of the health policy maker\u2019s decision to intervention?

Mohsen Bayati,Vahid Yazdi-Feyzabadi,Mohammad Hossein Mehrolhassani

doi:10.1186/s12962-019-0197-0

Abstract

BackgroundEquity in health financing as one main aspect of health equity plays an essential role on the path toward universal health coverage. Out of pocket payment (OOP), a source with high share to total health expenditure, is an inequitable mechanism for health financing.Main bodyThe OOP has been considered regressive (Kakwani index with a negative value) in nature. However, in some studies especially in developing countries, it is reported to be progressive (Kakwani index with a positive value). The main questions are: Is the progressive OOP equitable? What causes this contradiction? What can we do for the proper interpretation? And what are policy implications of this issue? In this commentary we briefly elaborate on these issues. We present several reasons for progressivity of OOP, and several methodological and policy issues for addressing it.ConclusionsEven if the OOP is progressive and the share of poor people is low, this may financially limit their access to health services, increase their risk of incurring catastrophic health expenditure (CHE), and even pushing them more into poverty. In order to provide a comprehensive picture of equity in health financing, other financial protection indicators such as the redistributive effect, re-rating, exposure to CHE, and impoverishment due to health expenditure should also be estimated and reviewed.

Highlights

Equity in health financing as one main aspect of health equity plays an essential role on the path toward universal health coverage
Even if the OOP is progressive and the share of poor people is low, this may financially limit their access to health services, increase their risk of incurring catastrophic health expenditure (CHE), and even pushing them more into poverty
In order to provide a comprehensive picture of equity in health financing, other financial protection indicators such as the redistributive effect, re-rating, exposure to CHE, and impoverishment due to health expenditure should be estimated and reviewed

Summary

Conclusions

OOP, which are always an inequitable financing mechanism, can challenge both the rich and poor in paying for health services. Despite the regressive tax based system, there are some difficulties to meet the requirements to institutionalize a new reform for moving forward to less regressive or more progressive financing system Most important of these difficulties are including the limitation to finance costs or other required resources for implementation of new mechanisms, considerations related to degree of socioeconomic development (the limited income capacity of the country and households), low fiscal capacity to mobilize enough money to meet the desired level of expenditures in the health sector (many workers in the informal sector of economy), and lack of enough political accountability (the degree of democratic political system and the authority over the financing process that allows citizens appropriate control over the process.).

Background