Decomposition of socioeconomic inequalities in catastrophic out-of-pocket expenditure for healthcare in Canada

Abstract

Despite a publicly financed health system for physician and hospital services, out-of-pocket health expenditure (OHE) accounts for a significant proportion of healthcare financing in Canada. We pooled annual Surveys of Household Spending conducted from 2010 to 2017 (n=34,105) to estimate the catastrophic out-of-pocket expenditure (COHE) burden using two definitions: the budget share (OHE exceeding 10% of a household's total consumption) and capacity-to-pay (OHE exceeding 40% of a household's total consumption minus basic subsistence needs). The Wagstaff index (WI) and the Erreygers Index (EI) were used to quantify and decompose socioeconomic inequalities in COHE. Results demonstrate that approximately 6% and 10% of the households faced COHE in Canada, depending on whether we used the budget share or capacity-to-pay approach to measure COHE. The COHE was found to be concentrated among low socioeconomic status (SES) households. Decomposition results indicate that besides SES, household characteristics (e.g., households headed by females and the presence of senior(s) in the households) were the most important factors contributing to the concentration of COHE among the poorer households. The lower utilization of healthcare services among the poor resulted in reduced COHE among these households. A higher burden of COHE is a major concern in Canada. Policies to enhance risk protection among specific populations such as the seniors are required to improve equity in healthcare financing in Canada.