Kakwani Index Research Articles

Has equity in government subsidy on healthcare improved in China? Evidence from the China\u2019s National Health Services Survey

BackgroundMonitoring the equity of government healthcare subsidies (GHS) is critical for evaluating the performance of health policy decisions. China’s low-income population encounters barriers in accessing benefits from GHS. This paper focuses on the distribution of China’s healthcare subsidies among different socio-economic populations and the factors that affect their equitable distribution. It examines the characteristics of equitable access to benefits in a province of northeastern China, comparing the equity performance between urban and rural areas.MethodsBenefit incidence analysis was applied to GHS data from two rounds of China’s National Health Services Survey (2003 and 2008, N = 27,239) in Heilongjiang province, reflecting the information in 2002 and 2007 respectively. Concentration index (CI) was used to evaluate the absolute equity of GHSs in outpatient and inpatient healthcare services. A negative CI indicates disproportionate concentration of GHSs among the poor, while a positive CI indicates the GHS is pro-rich, a CI of zero indicates perfect equity. In addition, Kakwani index (KI) was used to evaluate the progressivity of GHSs. A positive KI denotes the GHS is regressive, while a negative value denotes the GHS is progressive.ResultsCIs for inpatient care in urban and rural residents were 0.2036 and 0.4497 respectively in 2002, and those in 2007 were 0.4433 and 0.5375. Likewise, CIs for outpatient care are positive in both regions in 2002 and 2007, indicating that both inpatient and outpatient GHSs were pro-rich in both survey periods irrespective of region. In addition, KIs for inpatient services were −0.3769 (urban) and 0.0576 (rural) in 2002 and those in 2007 were 0.0280 and 0.1868. KIs for outpatient service were -0.4278 (urban) and -0.1257 (rural) in 2002, those in 2007 were −0.2572 and −0.1501, indicating that equity was improved in GHS in outpatient care in both regions but not in inpatient services.ConclusionsThe benefit distribution of government healthcare subsidies has been strongly influenced by China’s health insurance schemes. Their compensation policies and benefit packages need reform to improve the benefit equity between outpatient and inpatient care both in urban and rural areas.

The distributional impact of health public expenditure in Italian regions: what happens when cost-effectiveness and quality matter?

We evaluate the implications of in-kind health transfers on household income distribution in Italy, factoring in the quality of government-provided healthcare in different regions (which are responsible for health policy). The novelty of this approach is that we explicitly acknowledge differences in the value of in-kind transfers resulting from cross-regional variations in service quality. The aim of this paper is twofold. First we adopt a fiscal federalism approach to assess the distributional implications of adding health public expenditure to the disposable income of Italian households and we compare the distributional results across regions. We then take a yardstick competition approach to evaluate the distributional implications of accounting for the quality and efficiency of services. To analyze the distributional impact of health public expenditure, we show the difference of the Gini index between final income and disposable income for each region and the progressivity index (Kakwani index). The re-ranking effect and the average in-kind benefit rate (that is the ratio of total in-kind transfers to disposable income) are also computed. Our analysis provides convincing evidence that when health services are evaluated at production cost, in-kind benefits reduce overall inequality on the distribution of disposable income. However, this effect is seen to be lower when the yardstick competition approach is applied to account for quality and cost-effectiveness, and, more importantly, it shows a geographical pattern.

Türkiye’de sağlık harcamalarının finansmanı açısından hakkaniyet

This study analyzes whether financing of Turkish health care system is equitable by Kakwani Index. Results show that poorer households contribute less to healthcare financing in total using 2002-2003 National Health Accounts Household Expenditure Survey which has the most detailed data on health expenditure. However, detailed inspection of financing sources reveals indirect taxes and out of pocket expenditures as regressive, i.e. inequitable financing sources. This analysis can be replicated when a similar micro data set is published.

La equidad del sistema tributario y su relación con la moral tributaria. Un estudio para América Latina

This paper studies the association between tax morale and tax equity taking into account its horizontal and vertical dimensions. Although recent researches have considered the same subject, they exhibit several limitations such as the lack of objective measures of tax inequity and a coverage that favors developed countries. Meanwhile, this work presents interesting results by taking the survey conducted by Latinobarómetro (2011) in 18 countries of Latin America and adding the Atkinson-Plotnick and Kakwani indexes for the Personal Income Tax (pit). For instance, we find that not only the low progressivity in the pit and its horizontal inequity are associated with a lower tax morale, but also do they show the highest effects in comparison with other control variables.

Does cost sharing do more harm or more good? - a systematic literature review.

BackgroundThere are positive and negative consequences of the implementation of out of pocket (OOP) payments as a source of the healthcare financing. On the one hand, OOP burden increases awareness of treatment costs and limits unnecessary use of healthcare services. On the other hand, it may prevent the sick from accessing needed care. Consequently there are several aspects that ought to be taken into consideration while defining the optimal structure of OOP payments. The objective of this study was twofold. Firstly, it was to understand what actions are taken to decrease the OOP burden. Secondly, it was to address the question whether the implementation of any form of formal OOP payments may impact negatively upon fairness in financial contribution.MethodsThe literature search was conducted using the Pubmed, Embase, Cochrane Library and Center of Review and Dissemination databases. Only studies which measured the Kakwani index of progressivity in at least two time points were included. Articles written in English published between January 2004 and September 2015 were searched. No geographical restriction was imposed. An increment of more than 0.10 in the Kakwani index was considered as a significant health policy impact.ResultsIn total 16 publications were included, of which nine studied attempts to decrease the OOP burden, four described the consequences of the introduction of formal fees, and three covered both topics. Overall, a significant health policy impact was noted in four cases. All of them related to a reduction in the OOP burden, with three and one noting a change towards the progressivity and regressivity of direct healthcare payments respectively. Among jurisdictions which introduced formal fees, none study noted a significant impact on the regressivity of OOP spendings.ConclusionsIn the majority of cases, a health policy impact on the distribution of OOP health payments was insignificant. The reduction of OOP burden cannot be achieved successfully without adequate extension of healthcare coverage or engagement of other sources of healthcare financing. When formal fees are being introduced, protection against catastrophic healthcare payments is needed for the most vulnerable groups.

Analysis of equality in Iranian household healthcare payments during Iran's fourth development program.

IntroductionToday, the provision of healthcare should be efficient and equitable to achieve the health system’s goals. The aim of this study was to survey equality in healthcare expenditures and its effects on income redistribution.MethodsThis study was a descriptive-analysis, cross-sectional study that was conducted with data obtained from the Statistical Center of Iran (SCI) during 2006 and 2011. The source population and study population were the urban and rural residents of Iran and their households’ income and expenditures on health. The analysis was based on annually aggregated data from all provinces relative to their share of the total population. The data were collected using a pre-tested checklist consisting of two sections. The first section was used to retrieve data about total gross non-food expenditures of households. The second section retrieved out-of-pocket payments for healthcare. The data that were collected were analyzed using a Microsoft Excel spreadsheet. The Kakwani index was used to measure the extent of the deviation from equity. The redistributive effect of healthcare costs was considered as the impact of healthcare payments on households’ income distribution.ResultsThe overall Kakwani index during the fourth development program for urban households was progressive (OKI = 0.013), but it was regressive for rural households (OKI = −0.012). Healthcare payments had a negative effect on income redistribution in urban areas during the entire period of the study, and they had a positive effect in rural areas, except for the years 2010 and 2011, for which the effects were negative and non-existent, respectively.ConclusionBy regarding the regressive Kakwani index and the negative effect of healthcare expenditures on income redistribution in some years, the government can use health grants, such as increasing health facilities and supplementary insurance, to increase the ability of households to deal with the cost of developing a remedy and reducing health inequalities.

Inequity in Health Care Financing in Iran: Progressive or Regressive Mechanism?

Having progressive health finance mechanism is very important to decrease inequity in health systems. Revenue collection is one of the aspects of health care financing. In this study, taxation system and health insurance contribution of Iranians were assessed. Data of 2012 household expenditures survey were used in this study, and payments of the families for health insurances and tax payments were extracted from the study. Kakwani index was calculated for assessing the progressivity of these payments. At the end, a model was designed to find the effective factors. We found that taxation mechanism was progressive, but insurance contribution mechanism was very regressive. The portion of people living in urban regions was higher in the payments of insurance and tax. Less educated families had lower contribution in health insurance and families with more aging persons paid more for health insurance. Policy makers must pay more attention to the health insurance contribution and change the laws in favour of the poor.

Who benefited from the New Rural Cooperative Medical System in China? A case study on Anhui Province.

BackgroundThe goal of the New Rural Cooperative Medical System (NCMS) is to decrease the financial burden and improve the health of rural areas. The purpose of the present study is to determine how government subsidies vary between poorer and wealthier groups, especially in low-income regions in rural China.MethodsThe distribution, amount, and equity of government subsidies delivered via NCMS to rural residents at different economic levels were assessed using benefit-incidence analysis, concentration index, Kakwani index, Gini index, Lorenz curve, and concentration curve. Household and health institution surveys were conducted in 2010, covering 9701 residents. Household socio-economic status, healthcare costs, out-of-pocket payments, and utilization information were collected in household interviews, and reimbursement policy was provided by institutional survey.ResultsThe government subsidy concentration index was −0.055 for outpatients and 0.505 for inpatients; and the outpatient and inpatient subsidy Kakwani indexes were −0.376 and 0.184, respectively. The poorest 20 % of populations received 3.4 % of the total subsidy output; while the wealthiest 20 % received 54.3 %. The results showed that the distribution of outpatient subsidies was equitable, but the hospital subsidies disproportionally benefited wealthier people.ConclusionsWealthier people benefited more than poorer people from the NCMS in terms of inpatient and total subsidies. For outpatients, the subsidies were unrelated to ability to pay. This contradicts the common belief that the NCMS does not exacerbate benefit inequity. Long-term policy is required to tackle this problem, specifically of redesign the NCMS reimbursement system.

The Progressivity Of The First Income Tax In The United Kingdom: Data From 1799/1800 And 1815/1816

William Pitt the Younger’s government introduced a national income tax in the United Kingdom in 1799 to help pay for the war against France. When the war ended, income tax was repealed. The tax was unpopular from the beginning and was regarded as being unfair. Progressivity is generally regarded as being a measure of equity. This research looks at the progressivity at the beginning and end of the first UK income tax. Both the Suits and Kakwani indices are used to measure the level of progressivity. It was found that at the beginning the tax was very progressive for taxpayers. However, by the time it was repealed it, the level of progressivity was much reduced.

Assessing equitable health financing for universal health coverage: a case study of South Africa

ABSTRACTThis article argues that an assessment of progressivity over time can provide an indication of progress towards a ‘more’ progressive or a ‘less’ regressive health financing system and can be useful to policymakers. It introduces a framework to characterize ‘shifts’ in progressivity in health financing between two time periods using the popularly known Kakwani index of progressivity and other associated indices. It also decomposes the ‘shifts’ in progressivity into the relative contributions of the changes in income distribution and the changes in the distribution of health payments. Further, it proposes graphics that statistically analyses how the ‘shifts’ in progressivity vary along the distribution of income. A pro-poor (pro-rich) shift implies that the health financing mechanism is becoming more (less) progressive or less (more) regressive between two time periods. A proportional shift means that progressivity is constant between the two periods. This framework is applied to nationally representative household data from South Africa. It emerged that such characterization is a very useful tool for policy in assessing progress towards equitable health financing.

Who Benefits from Public Healthcare Subsidies in Egypt?

Direct subsidization of healthcare services has been widely used in many countries to improve health outcomes. It is commonly believed that the poor are the main beneficiaries from these subsidies. We test this hypothesis in Egypt by empirically analyzing the distribution of public healthcare subsidies using data from Egypt Demographic and Health Survey and Egypt National Health Accounts. To determine the distribution of public health care subsidies, we conducted a Benefit Incidence Analysis. As a robustness check, both concentration and Kakwani indices for outpatient, inpatient, and total healthcare were also calculated. Results show some degree of inequality in the benefits from public healthcare services, which varied by the type of healthcare provided. In particular, subsidies associated with University hospitals are pro-rich and have inequality increasing effect, while subsidies associated with outpatient and inpatient care provided by the Ministry of Health and Population have not been pro-poor but have inequality reducing effect (weakly progressive). Results were robust to the different analytical methods. While it is widely perceived that the poor benefit the most from health subsidies, the findings of this study refute this hypothesis in the case of Egypt. Poverty reduction measures and healthcare reforms in Egypt should not only focus on expanding the coverage of healthcare benefits, but also on improving the equity of its distribution.

Equity in health care financing in Portugal: findings from the Household Budget Survey 2010/2011.

Equity in health care financing is recognised as a main goal in health policy. It implies that payments should be linked to capacity to pay and that households should be protected against catastrophic health expenditure (CHE). The risk of CHE is inversely related to the share of out-of-pocket payments (OOP) in total health expenditure. In Portugal, OOP represented 26% of total health expenditure in 2010 [one of the highest among Organisation for Economic Co-operation and Development (OECD) countries]. This study aims to identify the proportion of households with CHE in Portugal and the household factors associated with this outcome. Additionally, progressivity indices are calculated for OOP and private health insurance. Data were taken from the Portuguese Household Budget Survey 2010/2011. The prevalence of CHE is 2.1%, which is high for a developed country with a universal National Health Service. The main factor associated with CHE is the presence of at least one elderly person in households (when the risk quadruples). Payments are particularly regressive for medicines. Regarding the results by regions, the Kakwani index for total OOP is larger (negative) for the Centre and lower, not significant, for the Azores. Payments for voluntary health insurance are progressive.

Equity in Health Care Financing Among Iranian Households

Background: One of the main challenges of all health systems is achieving equity in healthcare financing. The Kakwani index is an equity index used to show how distant a financing source is from the proportional status. Objectives: The present study aimed to measure the equity of Iran’s health system financing in rural and urban areas between 2001 and 2010 using the Kakwani index. Materials and Methods: This study analyzed secondary data for the years 2001 through 2010 in Iran. The data of annual household expenditures and an income survey conducted by the statistical center of Iran (SCI) were used in this study. In addition, out of pocket payments and health insurance premiums, as two sources of healthcare financing, were investigated regarding vertical equity. The T-test was used to test the dominance of the curves. Results: The Kakwani index was negative (regressive) for out of pocket payments among both rural and urban households (-0.168 in 2001 to -0.197 to 2010, and 0.104 in 2001 to 0.156 in 2010, respectively), it but did not follow a regular trend during the study period. On the other hand, the Kakwani index was positive (progressive) for health insurance premium payments in rural areas (0.065 in 2001 to 0.095 in 2010). In urban areas, this index was negative for health insurance between 2001 and 2006 (-0.04 and -0.004), respectively), but positive between 2007 and 2010 (0.003 and 0.016, respectively). The dominance test (T-test) showed the concentration curves of out of pocket payments in both areas dominated the Lorenz curve in all years, but the dominance test (T-test) for health insurance premium payments did not follow a regular trend during the study period. Conclusions: Due to the negativity of the Kakwani index for out-of-pocket payments, a great burden on the households can be predicted, and the progressivity of health insurance premium payments implies that expanding insurance coverage may lead to more equitable financing. Thus, the government should take the responsibility to expand the service and cost coverage of insurance plans and to develop policies that protect poor people.

Out-of-pocket payments in the Austrian healthcare system - a distributional analysis.

BackgroundOut-of-pocket spending is an important source of healthcare financing even in countries with established prepaid financing of healthcare. However, out-of-pocket payments (OOPP) may have undesirable effects from an equity perspective. In this study, we analyse the distributive effects of OOPP in Austria based on cross-sectional information from the Austrian Household Budget Survey 2009/10.MethodsWe combine evidence from disaggregated measures (concentration curve and Lorenz curve) and summary indices (Gini coefficient, Kakwani index, and Reynolds–Smolensky index) to demonstrate the distributive effects of total OOPP and their subcomponents. Thereby, we use different specifications of household ability to pay. We follow the Aronson–Johnson–Lampert approach and split the distributive effect into its three components: progressivity, horizontal equity, and reranking.ResultsOOPP in Austria have regressive effects on income distribution. These regressive effects are especially pronounced for the OOPP category prescription fees and over-the-counter pharmaceuticals. Disaggregated evidence shows that the effects differ between income groups. The decomposition analysis reveals a high degree of reranking and horizontal inequity for total OOPP, and particularly, for therapeutic aids and physician services.ConclusionsThe results – especially those for prescription fees and therapeutic aids – are of high relevance for the recent and on-going discussion on the reform of benefit catalogues and cost-sharing schemes in the public health insurance system in Austria.

Inequity in costs of seeking sexual and reproductive health services in India and Kenya.

ObjectiveThis study aims to assess inequity in expenditure on sexual and reproductive health (SRH) services in India and Kenya. In addition, this analysis aims to measure the extent to which payments are catastrophic and to explore coping mechanisms used to finance health spending.MethodsData for this study were collected as a part of the situational analysis for the “Diagonal Interventions to Fast Forward Enhanced Reproductive Health” (DIFFER) project, a multi-country project with fieldwork sites in three African sites; Mombasa (Kenya), Durban (South Africa) and Tete (Mozambique), and Mysore in India. Information on access to SRH services, the direct costs of seeking care and a range of socio-economic variables were obtained through structured exit interviews with female SRH service users in Mysore (India) and Mombasa (Kenya) (n = 250). The costs of seeking care were analysed by household income quintile (as a measure of socio-economic status). The Kakwani index and quintile ratios are used as measures of inequitable spending. Catastrophic spending on SRH services was calculated using the threshold of 10 % of total household income.ResultsThe results showed that spending on SRH services was highly regressive in both sites, with lower income households spending a higher percentage of their income on seeking care, compared to households with a higher income. Spending on SRH as a percentage of household income ranged from 0.02 to 6.2 % and 0.03–7.5 % in India and Kenya, respectively. There was a statistically significant difference in the proportion of spending on SRH services across income quintiles in both settings. In India, the poorest households spent two times, and in Kenya ten times, more on seeking care than the least poor households. The most common coping mechanisms in India and Kenya were “receiving [money] from partner or household members” (69 %) and “using own savings or regular income” (44 %), respectively.ConclusionHighly regressive spending on SRH services highlights the heavier burden borne by the poorest when seeking care in resource-constrained settings such as India and Kenya. The large proportion of service users, particularly in India, relying on money received from family members to finance care seeking suggests that access would be more difficult for those with weak social ties, small social networks or weak bargaining positions within the family - although this requires further study.

An Individual Relative Deprivation Index and Its Curve Considering Income Scope

The purpose of this paper is to build a new relative deprivation index with more properties than existing indices such as Yitzhaki index, Kakwani index and Esposito index. Through detailed analysis of the properties of above indices, we find that a new individual index can be derived through introducing income scope into deprivation between two individuals. The proposed index fills up the shortcomings of existing indices. It satisfies more properties including non-negative decrease, concave, weak focus, dimensionless, normalization, translation invariance, scale invariance, additive decomposability and so on. Moreover, the new index conforms to our subject feeling and better reflects the connotations of relative deprivation. The article finally uses CGSS2008 rural data to draw the relative deprivation curves and analyze its sensitivity to max and min income.

Who benefits from government healthcare subsidies? An assessment of the equity of healthcare benefits distribution in China.

BackgroundImproving the equitable distribution of government healthcare subsidies (GHS), particularly among low-income citizens, is a major goal of China’s healthcare sector reform in China.ObjectivesThis study investigates the distribution of GHS in China between socioeconomic populations at two different points in time, examines the comparative distribution of healthcare benefits before and after healthcare reforms in Northwest China, compares the parity of distribution between urban and rural areas, and explores factors that influence equitable GHS distribution.MethodsBenefit incidence analysis of GHS progressivity was performed, and concentration and Kakwani indices for outpatient, inpatient, and total healthcare were calculated. Two rounds of household surveys that used multistage stratified samples were conducted in 2003 (13,564 respondents) and 2008 (12,973 respondents). Data on socioeconomics, healthcare payments, and healthcare utilization were collected using household interviews.ResultsHigh-income individuals generally reap larger benefits from GHS, as reflected by positive concentration indices, which indicates a regressive system. Concentration indices for inpatient care were 0.2199 (95% confidence interval [CI], 0.0829 to 0.3568) and 0.4445 (95% CI, 0.3000 to 0.5890) in 2002 (urban vs. rural, respectively), and 0.3925 (95% CI, 0.2528 to 0.5322) and 0.4084 (95% CI, 0.2977 to 0.5190) in 2007. Outpatient healthcare subsidies showed different distribution patterns in urban and rural areas following the redesign of rural healthcare insurance programs (urban vs. rural: 0.1433 [95% CI, 0.0263 to 0.2603] and 0.3662 [95% CI, 0.2703 to 0.4622] in 2002, respectively; 0.3063 [95% CI, 0.1657 to 0.4469] and −0.0273 [95% CI, −0.1702 to 0.1156] in 2007).ConclusionsOur study demonstrates an inequitable distribution of GHS in China from 2002 to 2007; however, the inequity was reduced, especially in rural outpatient services. Future healthcare reforms in China should not only focus on expanding the coverage, but also on improving the equity of distribution of healthcare benefits.

Improving access to education for South African children who attend school with a tracheostomy

model conditional on the crowding out of tobacco was created using quadratic conditional Engel curves. X2 tests for consumer separability were also performed. Additionally, an analysis of tobacco tax progressivity was completed in order to enhance policy recommendations. Kakwani indices were generated and dominance tests conducted. Findings: Overall, households which consume tobacco spend less on certain commodities compared to households which do not consume tobacco (reduction of expenditure on fruits, vegetables, grains, pulses, education, transportation and fuel are significant at a 5% level). These goods have nutrition and family welfare implications. Generally, trends are more pronounced in urban settings. Also, poorer quintiles tended to spend a greater proportion of their budget on tobacco (3.6% poorest quintile, 2.7% richest quintile). X2 tests led to rejection of the separability between tobacco and most other goods, meaning that tobacco consumers have different preferences and behave differently than non-tobacco consumers.The preliminary conditional demand model confirms many of the trends in the descriptive statistics, namely that vegetable and education spending shares are adversely impacted by tobacco consumption. Initial analysis demonstrates that tobacco taxation is progressive, highlighting potential equity implications to increases of tobacco taxation. Interpretation: There is evidence to suggest that tobacco spending crowds-out the consumption of goods, such as vegetables and education. In particular, poor households and those living in urban areas are most vulnerable. Key policy implications arise regarding the importance of tobacco control measures, such as taxation. Funding: None. Abstract #: 01NCD025

Personal income tax reforms and tax progressivity in Slovenia, 1991-2012

Using two different data sets, both derived from the personal income tax files, this paper analyses income inequality and the effects of the personal income tax on after-tax income of employees in Slovenia. It has been shown by using the Kakwani index of progressivity that increases in tax progressivity came in leaps and bounds upon the introduction of new PIT legislation. After the early years of transition (1991-1993), characterized by a large increase in income inequality, the distribution of income has experienced rather small changes; this can be attributed to the introduction of the minimum wage and introduction of a tripartite institution (The Economic and Social Council), responsible for wage negotiations. Inequality of employee’s income has even been decreasing since 2005; some of this decrease is due to changes in the tax base, as PIT legislation introduced schedular taxation of capital income in 2005 and differentiated tax allowances in 2008. The share of income accruing to the top 1% of earners has not been increasing, but has been fluctuating, though on a decreasing trend in the last 10 years.

Predicting Consumption Expenditure for the Analysis of Health Care Financing Equity in Low Income Countries: a Comparison of Approaches

The analysis of equity in the distribution of health care payments requires nationally representative income and expenditure surveys, containing information on health care payments and ability to pay. Such national household surveys in developing countries collect limited information on out-of-pocket payments for health care but comprehensive information on household consumption expenditure (a proxy of income). There are also limited nationally representative health surveys to conduct equity analyses requiring an administration of small health-specific surveys to collect detailed information on health care payments. However, collecting household expenditure is expensive and time . This study compares quantile regression to Ordinary Least Square in predicting consumption expenditure. Split sample method and cross validation tests are used to evaluate the prediction methodology. Unlike OLS, the quantile model does not distort the values of, the Gini index, the concentration index and the Kakwani index and is the preferred method for predicting consumption expenditure for financing incidence analysis.