Assessing the Distribution of Household Financial Contributions to the Health System: Concepts and Empirical Application

In the past decade, there has been considerable interest in analysing and understanding the distribution of health system contributions across households (1–11). The fairness in financial contribution measure presented in The World Health Report 2000 (12) contributed to this heightened attention towards health system financing arrangements (9;13–19). Protecting households from excessively large or catastrophic health payments has also played a prominent role recently in national policy debates in a number of countries (20–23). The analysis of the consequences of household health system contributions can be divided into two broad approaches: the income approach and the burden approach. The former examines the effect of health system payments in the space of income. The key concern is the marginal effect of health systems financing arrangements on the broader construct of total household income. The effects in the space of income have been measured in terms of changes in its distribution (5–7;18) and more recently on changes in levels of poverty (10). The latter examines health system payments in terms of the impact or disutility experienced by households because of these payments. The WHO measures of the fairness in financial contribution (2;11) and studies of catastrophic health payments (24) are examples of the burden approach. To further clarify the conceptual distinction between the income and the burden approaches, Table 38.1 summarizes the main approaches and types of measurements that are possible. The effects of health system payments on households in the space of income can be assessed in terms of changes in the full distribution of income, most commonly reported using the redistributive effect (RE), or in terms of differences in the number of households falling below the poverty line (DH) before and after health system payments. In the burden space, the complete distribution of disutility or impact of financial payment on households requires a distributional measure analogous to the ones used in the income space; the WHO fairness in financial contribution index (FFC) was developed for this purpose. The fraction of households facing a burden above a fixed threshold (%CAT), considered to involve catastrophic payments, is analogous to the DH in the income space and focuses attention on one tail of the distribution of household financial burden. The purpose of this chapter is to use household survey data from 59 countries to illustrate the two different approaches to analysing the consequences