Evidence base on the impact of ill-health on individuals and households
Explaining the incidence of catastrophic expenditures on health care: comparative evidence from Asia
Prepayment mechanisms can protect poor households from unforeseen medical costs
Authors:
O. O’Donnell; E. van Doorslaer; R. P. Rannan-Eliya
Publisher:
Equitap , 2005
Heavy reliance on out of pocket (OOP) financing of health care in most developing countries leaves households exposed to the risks of unforeseen medical expenditures. This paper looks at the incidence of catastrophic medical expenditures across households in six Asian countries/territories which differ in levels of income, degree of reliance on OOP financing, and the incidence of catastrophic payments. Theses countries are Bangladesh, Hong Kong, India, Sri Lanka, Thailand and Vietnam.
The paper finds that the probability of incurring catastrophic payments is generally higher in rural areas and lower among households with a sanitary toilet and safe drinking water. This suggests that public health interventions might be effective measures to protect households from the risk of burdensome payments for health care. There is also evidence from Vietnam and Thailand showing that health insurance is effective in protecting against catastrophic payment risks. The paper concludes that the development of public or private prepayment mechanisms based on resource pooling offers protection from catastrophic risks to those that are currently able to respond to unforeseen medical needs. They would also make health care more affordable and accessible to poorer households operating within very tight and inflexible budgets that cannot currently respond to health shocks.
