Inequity in household health care finance in vietnam

Background

Equity in healthcare financing is a critical global issue, with many countries striving to create systems that promote, prevent, treat, and rehabilitate health interventions at affordable costs This effort aims to ensure equitable access and financial risk protection (WHO, 2005) However, low- and middle-income countries face significant challenges, particularly due to their reliance on out-of-pocket payments for healthcare (WHO, 2010) Vietnam, as a developing nation, is no exception and must work to improve its health financing system to achieve universal coverage as a key policy objective.

Equitablefinancingisakeyobjectiveofhealthcaresystems.Itsimportanceise videncedinpolicy documents,policystatements,the workofh e a l t h econom ists an d policya n a l y s t s T h e f i n a n c i n g o f h e a l t h c a r e isa s u b j e c t o f maj orc o n c e r n throughouttheworld.Theconventionalcategorisationsoffinancesourc eforhealthcarea r e t a x a t i o n , s o c i a l h e a l t h i n s u r a n c e , a n d o u t - o f - p o c k e t payments.A n u n d e r st a n d i n g o f t h e e q u i t y i m p l i c a t i o n s w o u l d h e l p policym a k e r s i n a c h i e v i n g equitablefinancing.

Themainpurposeofthisresearchwastocomprehensivelyassesstheequityofh e a l t h carefinancinginVietnam,whichrepresentsanewcountry contextforth eq u a n t i t a t i v e techniquesused.Inthisresearch,authorusestheconcentrationindextoas sessinequalityandKatwaniindextoassesstheinequityofhealthcarefinance.

Thestudy evaluatedeachofthefourfinancingsources(outpatientandinpatiente x p e n d i t u r e s , h e a l t h i n s u r a n c e , o u t - o f - p o c k e t payments)i n d e p e n d e n t l y , a n d s u b s e q u e n t l y bycombined t h e f i n a n c i n g s o u r c e s t o e v a l u a t e t h e w h o l e f i n a n c i n g system.Theauthoralsoass essesinequalityofexpenditureonlyinhealthcareandt o ta l e x p e n d i t u r e i n c l u d i n g f o o d a n d n o n -

2 f o o d e x p e n d i t u r e s o f h o u s e h o l d s M o r e o v er , the author alsouses additionalmethodologyto assessthatwhich sources mostlyaffectinequityofhealthcarefinancebyapplying themethod decompositionof expenditure

Definitiono f E q u i t y i n v o l v e s a v a l u e j u d g m e n t o f f a i r n e s s o n t h e v a r i a t i o n s f r o m theequalityinthepopulation.Equityinhealthcarefinancingisa ssessedbythe degreeofinequality inpayingforhealth carebetweenhouseho ldsofunequalAbilityT o Pay( A T P )

ATPcanbemeasuredbythetotale x p e n d i t u r e ofhousehold,includingfood,non -foodpaymentsandhealthcareexpenses.

TostrengthentheimportantofhealthcarefinancerelatedtoATP,many studieshaveusedATPtoevaluatetheinequityinhealthcarefieldsuchasATPinDenmarka n d theUK;Ireland,PortugalandSpain;ItalyandtheNetherlands;andtaxf i n a n c i n g i nSwitzerland.Furthermore,theaccordanceofhealthpaymentstoATPisregardedasanimp ortantobjectiveinthefinanceofhealthcareinBelgium,France,Germany,theNetherlan ds.Policymakersinvariouscountriesareseentocommitt o w a r d s financinghealt hcareaccordingtoATP.

2 0 0 4 ) , Wagst aff and D o o r s l a e r ( 1 9 9 3 , 1 9 9 7 ) , W a g s t a f f ( 2 0 0 2 ) h a v e s t u d i e d i n c o m e - r el a t ed in e q u al i t y in he a lt h c ar e u t i l i z a t io n , e q u i t y i n h e a l t h c a r e d e l i v e r y , e q u i t y inh e a l t h carefinance,andinequalitiesinhealthbyusingATP.

TheMinistryofHealth(MOH)inVietnamalsoagreetousethenewnation alhealthfinancingschemeberelatedtoATP(PAHE,2011).

Insummary,t hi s studyusetheconcentrationindex andKakwaniindexf orthem e a s u r e m e n t o f A T P i n e q u a l i t y andi n e q u i t y inhea lt h c a r e f i n a nc e p r o p o s e d b y W a g s t a f f an d D o o r s l a e r (2000)toassesswhethertherearein equityandi n e q u al i ty inh e a l t h c a r e s y s t e m a n d w h i c h f a c t o r s a f f e c t m o s t l y t ot h e i n e q u i t y in h e a l t h carefinancesysteminVietnam.

ResearchObjectives

Thisstudypresentsaninequityassessmentofthehealthfinancingsystem,and d r a w s t o g e t h e r a l l f i n a n c e s o u r c e s i n V i e t n a m t o e v a l u a t e t h e w h o l e f i n a n c i n g system.Thegeneralobjectiveistoanalyzetheinequityofhealt hcarefinancewithq u i n t i l e ofability-to- payofVietnamhouseholds.Specificobjectivesare:

1 Toc a l c u l a t e t h e i n e q u a l i t y i n d i c e s ( C I s ) a n d t h e i n e q u i t y i n d i c e s ( K a t w a n i i n d i c e s ) o f healthcarefinancevariablesofhouse holdssuchastotalexpenditure,healthpayments,out-of- pocketforhealth,foodornon-foodpayments.

Datasource

Thisstudyusesth e datasets ofV iet na m LivingStandards Survey2012and2010(VHLSS2012,2010)withhouseholdsasobservations.

StudyDesign

Chapter2presentsgeneraldefinitionofinequalityandinequityinhealth,healthf i n a n c e variables,andmethodsmeasureinequityindices.

Definition

Socialequity

 Libertarians emphasizea respectfornatural rights,focusingin particularontwoo ftherights:rightstolifeandtopossessions.

 Rawlsians( 1 9 7 1 ) p r o p o s e s t w o p r i n c i p l e s o f s o c i a l j u s t i c e , n a m e l y t h a t individualsshouldhavethemaximallibertycompatiblewiththesamedegre eofl i b e r t y foreveryoneandthatdeliberateinequalitiesareunjustunlessthey workt o theadvantageoftheleastwelloff.

 Marxistsemphasize“needs”,principleof“distributionaccordingtoneed”.Andth isprincipleiscanbeinterpretedas“fromeachaccordingtohisabilitytopay”. Healthequityalsohas m a n y perspectives o f m a n y different reseachers andi n st itu tion s ontheworld,specificdescribedatTable1:

3 Whitehead1990,1992 Healthinequitiesaredifferencesinhealththatareav oid ab l e,unjustandunfair

Equityinhealthcaremeansequalutilization,d istri bu ti onaccordingtoneed,equalaccessandequal healthoutc omes

Healthequityistheabsenceofsystematicandpotentia llyremediabledifferencesinoneormoreasp ect s ofhea lthacrosspopulationsorpopulationsub gr ou ps defined socially,economically,demographicallyorgeograp hically

“HealthEquityistheabsenceofpotentiallyav oidabl e differencesinhealth(orhealthrisksthatpo li cy caninflue nce)betweengroupsofpeoplewh oaremoreandlessadva ntagedsocially”

Equityinhealthcare

Hurst(1985)studies ofi n e q u i t y inhe al th ca r e financehave t e n de d t otak e a s t h ei r startingpointthepremisethathealth careoughttobefinancedaccor dingtoa b i l i t y topay

Theegalitarianswhoareconcernedtoensurethathealthcareisfinancedaccordin gto abilitytopayand thatthe deliveryofhealth care isorganized insuch awaythateveryoneenjoysthesameaccesstocareandthatthecareisallocatedont h e basisofneedwithaviewtopromotingequalityofhealth.

Thegeneralpicture ofhealth carefinancewhichwasaffectedbymanyd et e rm in an ts suchasindividuallifestypefactors,socialandcommunity networks,

Figure 1: Social determinants of health and health equity andg e n e r a l s o c i o - e c o n o m i c , c u l t u r a l a n d e n v i r o n m e n t a l c o n d i t i o n s T h e d e t a i l e d wasde scribedbyWHOinFigure1asbelow.

InequalityandInequity

Actually,inequalitiesinhealtharebaseduponobserveddifferencesondisparit ieso n health.Healthinequaliesaredifferencesinhealthoutcomesandtheird et er min an t s betweensegmentsofthepopulation,asdefinedbysocial,demo gr aphic ,environmental,andgeographicattributes.

Ont h e o t h e r h a n d , i n e q u i t i e s inh e a l t h a r e b a s e d o n e t h i c a l j u d g m e n t s a b o u t t h e f ai rn e ss ofthedifferences.Healthinequityreferstothoseinequalitiesinhe alththata r e deemedtobeunfairorstemmingfromsomeformofinjusticeor“theabsenc eofp o t e n t i a l l y avoidabledifferencesinhealthbetweengroupsofpeoplewhoa remorea n d lessadvantagedsocially”(PAHE,2013)

Anexampleofhealthinequality isthehigherincidenceofillnessamongthee lde r people as compared withyoung people.Thisisanunavoidablephenomenon(dueto biologicalor igin)anddo esnotimplyamoraljudgm ent.However,ifther eexi stsahigher i n c i d e n c e o fillnessamong thepoorelderlyascomparedwiththatamongthenon- poor elderly, thenthisreferstoasavoidableinequalityorinequity(determinedbysocio- ec o n o m i cf a c t o r s , etc)

Theg e n e r a l t e c h n i q u e s t o c a l c u l a t e a n d e v a l u a t e t h e h e a l t h c a r e i n e q u i t y mustfollowinmanydifferentlyresearchfields,describedinthestandardized modela s F i g u r e 3 ( P A H E , 2 0 1 3 ) H o w e v e r , t h e a u t h o r w a n t s t o e m p h a s i z e onlyt h e i n e q u it y inhealthcarefinance,sothedetailed research ismoremostlyconcentratedt h a n ininequityinhouseholdpaymentforhealthcareservices

Thep u r p o s e o f d e c r e a s i n g i n e q u i t y i n h e a l t h c a r e f i n a n c e i s t o r e d u c e t h e g a p b e t w e e n thepublicexpenditures andpersonalexpendituresforhealth care.Tocarryo n thisaimwemustmanageandcontrolthreeperspectiveslikeFigure4

VerticalequityandHorizontalequity

Verticale q u i t y : p e r s o n s o r f a m i l i e s o f u n e q u a l a b i l i t y t o paym a k i n g appropriately dissimilarpaymentsforhealthcare,and

Horizontalequity:p e r s o n s o r f a m i l i e s o f t h e samea b i l i t y topaymakingt h e samecontribution.Horizontalequityalsocanbedefinedintermsoftheextentto w h i c h thoseofequalabilitytopayactuallyendupmakingequalpayments,r e g a r d l e s s of, forexample, gender,maritalstatus, tradeunionmembership,placeofr e s id en c e , etc.

Abilitytopay–ATP

Ina d e v e l o p i n g - c o u n t r y c o n t e x t , l i k e V i e t N a m , g i v e n t h e l a c k o f o r g a n i z e d labormar ketsandthehighvariabilityofincomesovertime,householdconsumption( o r atleastexpen diture)isgenerallyconsideredtobeabettermeasureofwelfarea n d abilitytopa ythanincome.Withtheobjectiveofthisthesisissimply toassesst h e degreeofproportionalitybetweenhealthpaymentsandsomemeasureofl ivings t a n d a r d s , thenhousehold expenditures gross can beu s e d [20] The refore, inthis stud y abilitytopayistypicallytotalhouseholdconsumption,includingallpay mentst o w a r d healthcare.

Concentrationindex

Wagstaff(1991)published a paper on themeasurementofinequalities in health. Theprimaryobjectivesofthispaperwere:

(1)toprovideacriticalreviewofthevariousmeasures of inequality in health,

(2 )t oide ntif ywh ic hme a s ur e s a r ebe st su ite d to me a s ur ehe a lth in e q ua lity T hi s paperi d e n t i f i e d t h e t h r e e m e a s u r e s o f inequality,namely:( a ) t h e r a n g e ,( b ) t h e G i n i c o e f f i c i e n t (Lorenzcurve),and(c)theconcentrationindex(concentration curve)

Theconcentrationindex(CI)providesameasureofthemagnitudeofinequality.Itisd e f i n e d ast wice t h e a r e a bet wee n t h e co nce nt ra ti on c u r v e a n d th el ine o f

10 equality(Figure 5) The index hasamagnitudebetweenminusoneandplusone,andtakesthevalueofzerowhenthereisnos o c i o e c o n o m i c i n e q u a l i t y T h e c o n v e n t i o n i s t h a t t h e i n d e x t a k e s a n e g a t i v e v a l u e w h e n t h e c o n c e n t r a t i o n c u r v e l i e s a b o v e t h e l i n e o f e q u a l i t y a n d i t t a k e s a p o s i t i v e v a l u e w h e n t h e c o n c e n t r a t i o n liesbelowthelineofequ ality.TheabsolutevalueofCImeasuresthemagnitudeo f s o c i o - e c o n o m i c i n e q u a l i t y , t h e l a r g e r t h e a b s o l u t e v a l u e o f C I , t h e g r e a t e r the disparity.

A concentration index between 0.2 and 0.39 indicates a moderate level of inequality, while an index ranging from 0.4 to 0.6 signifies a high magnitude of inequality, warranting urgent attention An index of 0.6 or higher reflects a very high degree of inequality, highlighting the critical need for intervention.

Concentrationcurve

Theconcentrationcurveplotsthecumulativepercentage ofthehealthvaria ble(y- axis)a g a i n s t t h e c u m u l a t i v e p e r c e n t a g e o f t h e p o p u l a t i o n , r a n k e d byl i v i n g s t a n d a r d s , beginningwiththepoorest,andendingwiththeriches t(x- axis).Inotherwo rd s , itplotssharesofthehealthvariableagainstquantilesofthelivings tandardsvariable(Figure5)

KatwaniindicesandConcentrationcurves

Kakwani(1997)clarifiedtherelationshipbetweentwowidelyusedindicesofhealthi n e q u a l i t y namely:therela tiveindexofinequality(RII)andtheconcentrationindex( C I ) andexplainedwhythesearesupe riortotheotherindicesusedintheliterature.F o r example,theCIissensitivetosocioecon omicdimensionofinequalitiesinhealthbecauseitsvaluelies b e t w e e n -

Lpay(p)isthepaymentconcentrationcurve,whichplotsthecumulativeproporti ono f thepopulation[rankedaccordingtopre- paymentincomeaswithLpre(p)]againstt h e cumulativeproportionofhealthcarepayments.

Thedegreeofprogressivitycanthereforebeassessedbylookingatthesizeofthea r e a between Lpre(p)a n d Lpay(p).I f Gpreist h e G i n i c o e f f i c i e n t fo r pre- payment income,andCpayistheconcentrationindexforpayments,

Kakwani'sindexofprogressivity,KorπK,isdefinedas:πK=Cpay–Gpre

InequityorProgressivityofhealthcarefinance

 Ori s i t p r o g r e s s i v e - d o h e a l t h c a r e p a y m e n t s a c c o u n t f o r a n i n c r e a s i n g proportio nofabilitytopay(ATP)asthelatterrises?

 Or,istherearegressiverelationship,inthesensethatpaymentscomprisea decr easi ng shareofATP?

The Kakwaniindex (Kakwani,1977)is themostwidelyused summarymeasureo f progressivityi n b o t h t h e t a x a n d theh e a l t h f i n a n c e l i t e r a t u r e s

Gpre,w h e r e Cpayi st h e c o n c e n t r a t i o n i n d e x f o r h e a l t h paymentsa n d G preist h e G i n i c o e f f i c i e n t oftheATPvariable.ThevalueofπKrang esfrom–2to1.

Inthecaseofproportionality,theconcentrationliesontopoftheLorenzcurveandthein dexiszero.Butnotethattheindexcouldalsobezeroifthecurvesweretocross andpositiveandnegativedifferencesbetweenthemcancel.

Giventhis,itisimportanttousetheKakwaniindex,oranysummarymeasureofprogress ivity,asa s u p p l e m e n t t o , a n d n o t a r e p l a c e m e n t o f , t h e moreg e n e r a l grap hi cal analysis.

Decomposition

Thec o n c e n t r a t i o n i n d e x c a n b e e x p r e s s e d ast h e s u m o f a l l c o n t r i b u t i o n s o f determinants.Ittellsuswhichfactorscontributemosttotheobservedine qualityinagivenhealthoutcome.Incaseswheneconomicinequalityinthevaria bleofinterests( h e a l t h c a r e p a y m e n t s ) wasdetectedfrompreviousanalyses,regressionmodelingswerethenconductedto provideparametersfordecomposingthe c o n t r i b u t i o n s ofdifferentdetermin antstotheobservedsocio-economicinequityint h e variableofinterest.

Theruleofthumbwastoconsideronlythec o n ce n t r a t i o n indexforeconomic i n e q u a l i t y ofequalorgreaterthan0.2(Moderate,severeorextremeinequality )ford e c om p o si t io n analysis.

Wagstaff,D o o r s l a e r , a n d Watanabe( 2 0 0 3 ) d e m o n s t r a t e t h a t t h e h e a l t h concentration indexcanbedecomposedintothecontributionsofindivid ualfactorst o income- relatedhealthinequality,inwhicheachcontributionistheproductofthesensitivityo f h e a t h w i t h r e s p e c t t o t h a t f a c t o r a n d t h e d e g r e e o f i n c o m e - r e l a t e d in eq u al i ty inthatfactor.Foranylinearadditive regressionmodelofhealth(y),sucha s

𝜇𝜇 𝑘𝑘 𝜇𝜇 whereàisthemeanofy,𝑥𝑥̅ 𝑘𝑘is themeanofxk,Ckistheconcentrationindexf o r xk andG C ε ist h e g e n e r a l i z e d c o n c e n t r a t i o n i n d e x f o r t h e e r r o r t e r m (ε).E q u a t i o n

(b)showsthatCisequaltoa wei gh te d sumoft h e concentrationindicesof t h e k regressors,wherethe wei gh t forxkisth e elasticity ofy withrespect t oxk(𝜖𝜖 𝑘𝑘=

𝜇𝜇 relatedi n e q u a l i t y i n h e a l t h t h a t i s n o t e x p l a i n e d bys y s t e m a t i c v a r i a t i o n i n t h e regressorsbyincome,whichshouldapproachzeroforawell-specifiedmodel.

Themainaimofthismethodistounravelthecausesofhealthsectorinequalities,andt h e i r c h a n g e o v e r time.I n e q u a l i t i e s a r e c a u s e d byi n e q u a l i t i e s int h e deter minantso f t h e v a r i a b l e o f i n t e r e s t , a n d t h e d e c o m p o s i t i o n inE q u a t i o n ( b ) a l lo w s onetoassesstherelativeimportanceofthesedifferentinequalitiesi ngeneratinginequalitiesinthevariableofinterest

Reviewempericalstudiesabouthealthequityfinance

O'Donnell, Doorslaer, Wagstaff, and Lindelow (2005) authored a comprehensive handbook titled "Analyzing Health Equity Using Household Survey Data," aimed at providing researchers and analysts with a practical, step-by-step guide to measuring various aspects of health equity This resource encourages further analysis in the field of health equity, particularly in developing countries, leading to improved monitoring of health trends, a deeper understanding of the causes of health inequalities, and more extensive evaluations of the impact of development programs on health equity The authors employ multiple methods to assess inequity, primarily utilizing two indices: the concentration index and the Kakwani index for evaluation purposes.

9 3 ) h a v e p u b l i s h e d thearticle researched the equity in USA.

Oneofobjectivesistoclarifythemeaningofthetwodefinitionsofequitywhi chseemleastclear: “distributiona c cordingto need” and

“equalityof access” Authors alsoco n clu d eth a t th e principlesof“distributionaccordingtoneed”and“equ alityofaccess”have been,andcontinuetobe,interpretedinanumberofdifferentways,andthatthevariousinterpr e t a t i o n s a r e m u t u a l l y i n c o m p a t i b l e

Wagstaff and Doorslaer (1994) compared health inequality in a developed country, Canada, and a developing country, Vietnam, using data from the VHLSS 1998 and NPHSS 1994 Their study presents a framework for empirically assessing overall health inequality and socioeconomic health disparities This framework applies to both individual-level and grouped data, demonstrated through malnutrition rates among Vietnamese children and health utility among Canadian adults The findings reveal that socioeconomic inequalities contribute to approximately 25% of the overall health inequality in both countries.

Toexaminewhichindicesusedinanalyzinginequity,Kakwani,Wagstaff,D o o r s l a e r (1997)usedthedatasetofDutchHIS1980/81whichclarifiestherelationship between two widelyusedindicesofhealthinequalityand explainswhyt h e s e aresuperiortootherindicesusedintheliterature.Italsodevelopsasy mptoticestimatorsfortheirvariancesandclarifiestherolethatdemographicstandardization playsintheanalysisofsocioeconomicinequalitiesinhealth.

To present evidenceonincome-relatedinequalitiesinself-assessedhealthin ninei n d u s t r i a l i z e d countries,Doorslaer,Wagstaffandpartners(1997)use dthedatasetsofSweden,Switzerland,UK,US,Germanyamong1980s-

1990sintheirstudy.Healthi n t e r v i e w surveyd a t a w e r e u s e d t o c o n s t r u c t c o n c e n t r a t i o n c u r v e s ofself- assessedhealth,measuredasalatentvariable.Inequalitiesinhealthfavore dthehigherincomegroupsandwerestatisticallysignificantinallcountrie s.

InequalitieswereparticularlyhighintheUnitedStatesandtheUnitedKingdom.Am ongstotherEuropeans,Sweden,FinlandandtheformerEastGermanyhadthelowesti n e q u a l i t y A c r o s s countries,astrongassociationwasfoundbetwe eninequa litiesi nhealth a n d i n e q u a l i t i e s i n i n c o m e

O’Donnell, Doorslaer, and partners (2005) examined healthcare financing inequalities across 13 territories representing 55% of the Asian population Their study combined household payment survey data with Health Accounts data to analyze total health financing distributions Findings revealed that high-income households contribute more to healthcare financing than low-income households, particularly in low and lower-middle-income territories The level of development significantly influences out-of-pocket (OOP) payments, with low-income households in high-income economies facing a larger financial burden, while better-off individuals in poorer economies tend to spend more OOP This challenges existing literature, suggesting that the poor cannot afford healthcare in low-income settings Notably, Hong Kong exemplifies progressive financing through taxation, protecting low-income individuals from OOP costs, a structure also seen in Thailand, which achieves similar equitable outcomes.

Tocheckwhichfactorsmostlyaffectedtohealthcareinequity,manywritersu s e d decomp ositionmethodfortheirresearches,IremindthatonlyfactorsthatCIsa r e equalandgreatertha n0.2,meanthatmoderateandsevereinquality,thenford e c o m p o s i t i o n analysis.Below aresomestudiesontheworld.

Wagstaff,Doorslaer,Watanabe(2003)researchedthedecomposingthecausesofh e a l t h sectorinequalitieswithanapplicationtomalnutritioninequalitiesinVietnam,theyus ed V

H L S S 1993a n d 1 9 9 8 f o r t h e i r s t u d y I n e q u a l i t i e s a c r o s s t h e incomedist rib ut io ni n a v a r i a b l e y canb e d e c o m p o s e d i n t o t h e i r c a u s e s , a n d c h a n g e s i n i nequ al ity i n y c a n b e decomposedi n t o t h e e f f e c t s o f c h a n g e s i n t h e m e a n s a n d in eq u a l i t i e s inthedeterminantsofy,andchangesintheeffectsofthedeterminants ofy.Inequalitiesinheight-for- ageinVietnamin1993and1998arelargelyaccountedf o r byi n e q u a l i t i e s i n c o n s u m p t i o n a n d i n u n o b s e r v e d c o m m u n e - l e v e l influences.R i s i n g i n e q u a l i t i e s a r e l a r g e l y a c c o u n t e d f o r byi n c r e a s e s i n a v e r a g e c o n s u m p t i o n anditsprotectiveeffect,andrisinginequali tyandgenerali m p r o v e m e n t s atthecommunelevel.

Tocomparein eq ual it y decomposition from Vietnamand othercou nt ri es , W a g s t a f f (2005)alsoresearchedinequalitydecompositionandgeographictargeti ngw i t h applicationstoChinaandVietnam.Inthisresearch theyuseddatase tVHLSS1 9 9 8 ThestudyanswerthequestionHowfarareincome- relatedinequalitiesintheh e a l t h s e c t o r d u e t o g a p s b e t w e e n p o o r a n d l e s s p o o r a r e a s , r a t h e r t h a n d u e t o d i f f e r e n c e s betweenp o o r andl es s poorp eoplewithin areas?

T h i s no te sets outa methodforansweringthisquestion,andillustratesitwithtwoe mpiricalexamples.T h e disproportionateaccrualofhealthsubsidiestoVietnam’sbe tter- offisfoundtobel a r g e l y d u e t o t h e f a c t t h a t r i c h e r p r o v i n c e s h a v e l a r g e r p e r c a p i t a s u b s i d i e s , w h il e pro- richinequalitiesinhealthinsurancecoverageinruralChinaarefoundtob el a r g e l y d u e t o t h e f a c t t h a t b e t t e r - o f f v i l l a g e s h a v e b e e n m o r e s u c c e s s f u l a t p r e v e n t i n g thecollapseofthei rinsuranceschemes.

Whynes,Sach(2008)havest u d i ed h e a l t h c a r e f i n a n c e i n M a l a y s i a , they u s e d d a t a s e t s H E

9 2 / 9 3 f o r t h i s study.Theprimarypurposeofthispaperwastocomprehensivel yassesstheequityo f healthcarefinancinginMalaysia,whichrepresentsanewcountryco ntextfortheq u a n t i t a t i v e techniquesused.Thepaperevaluatedeachofthefivefinancin gsources( d i r e c t taxes,indirecttaxes,contributionstoEmployeeProvidentFund andSocialS e c u r i t y O r g a n i z a t i o n , p r i v a t e i n s u r a n c e a n d o u t - o f - p o c k e t p a y m e n t s ) i n d e p e n d e n t l y , andsubsequentlybycombinedthefinanci ngsourcestoevaluatethewholef i n a n c i n g system.R e s u l t s s h o w e d t h a t M a l a y s i a ' s p r e d o m i n a n t l y t a x - f i n a n c e d systemwasslightlyprogressivewithaKakwani'sprogressivity in dexof0 1 8 6

The report titled "A Health Financing Review of Vietnam with a Focus on Social Health Insurance" provides a comprehensive assessment of the current health financing system in Vietnam It analyzes the institutional design and organizational practices related to key health financing functions, including resource collection, pooling, and purchasing The findings highlight how these elements impact the overall performance of the health system Based on this analysis, the report identifies potential changes in institutional design and organizational practices that could facilitate progress towards achieving universal coverage in Vietnam.

Withallinternationalanddomesticstudies,researchingforequityespeciallyi n h e a l t h c a r e f i n a n c e b e c o m e s i m p e r a t i v e l y , V i e t N a m i s a d e v e l o p i n g c o u n t r y , t h e s e issuesevenmoreimportant.Theauthorwanttoanswerthequestionwhet heri n e q u i t y inhealthcarefinanceinVietnamdeservetotheissuetoexamine.Andhowt h e l evelofthatproblemcomparedtoothercountries?Tosupplytopolicy- makeralook toresolvethepresentproblem.

Inequality (CI index)& Inequity (Katwani index) in Vietnam?

Health expenses Food Expense Non-food Expense

Analyticalframework

The assessment of equity in healthcare financing utilizes established techniques from public finance literature, focusing on the notion that healthcare financed according to Ability to Pay (ATP) is deemed equitable To evaluate whether health payments undermine or contribute to equitable financing, it is essential to analyze the practical link between health payments and ATP Progressivity measures the deviation from proportionality in the relationship between health payments and ATP, highlighting the extent of inequality in healthcare financing among households with varying ATP levels A health payment system is considered progressive if it requires households with higher ATP to pay an increasing proportion, while a regressive system results in decreasing proportions for wealthier households Conversely, healthcare financing systems are deemed proportional when households with different ATP levels contribute the same percentage of their ATP towards healthcare costs.

Model

Examinetheregressionfunctionyi=xiβ+εiwithyi:dep endentvariable, xi:vectorofindependentvariales; εi:errorterms;theestimationofregressionfunction𝑦𝑦� 𝑖𝑖= 𝑥𝑥 𝑖𝑖𝛽𝛽 ̂+𝑒𝑒 𝑖𝑖

OrdinaryLeastSquare),sampleregressionfunctionw a s estimatedsothattotalofsquareo ferrorisminimize,meansthat

KoenkerandBasset(1978)analizedthedisadvantageofOLSmethod.Bothof𝑖𝑖=1 themo f f e r t h a t t h e OLSm e t h o d mustb e a f f e c t e d v e r y muchbyc o n s t r a i n t s a b o u t assumptionsandasymmetricobservations.Andcannotbeseenthegenerall o o k ofresearchquantities.Then,KoenkerandBassetsuggestedthenewr eg r es si on methodt o overcomet h i s d i s a d v a t a g e s , t h a t i s q u a n t i l e r e g r e s s i o n m e t h o d o l o g y I n s t e a d ofc a r r y onresearch onlyinconditional mean f u c t i o n as OLS,theregressioncalculateoneveryquantilesofdependentvariabletosee thegener al lookofresearchingproblems.

𝜏𝜏∈ (0,1)ist h e f u n c t i o n𝑄𝑄 𝜏𝜏 (𝑦𝑦 𝜏𝜏 )=𝑥𝑥 𝑖𝑖 𝛽𝛽 𝜏𝜏 ,w i t h i n𝛽𝛽 𝜏𝜏 ischoicedasiftotaloferror differentofquantileτisminimize.Meansthat:

Convenientformulafortheconcentrationindexdefinesitintermsofthecovarianceb e t w e e n t h e h e a l t h v a r i a b l e a n d t h e f r a c t i o n a l r a n k i n t h e l i v i n g s t a n d a r d s distr ibution(Jenkins,1988;Kakwani,1980;LermanandYitzhaki,1989),

Theconcentrationindex(C)canbecomputedveryeasilyfrommicrodatabyusing𝜇𝜇 the“ c o n v e n i e n t c o v a r i a n c e ” f o r m u l a I f t h e samplei s n o t s e l f - w e i g h t e d , w e i g h t s s h o u l d beappliedincomputationofthecovariance,themeanofth ehealthvariable,andt h e f r a c t i o n a l r a n k G i v e n t h e r e l a t i o n s h i p b e t w e e n c o v a r i a n c e a n d o r d i n a r y l e a s t squares(OLS)regression, anequivale ntestimateof t h e concentrationindex c a n beobtainedfroma“convenientreg ression”of a transformationof t h e healthvariableofinterestonthefractionalr ankinthelivingstandardsdistribution(Kakwani,Wagstaff,andDoorslaer,1997).Speci fically

Andwhere𝜎𝜎 𝑟𝑟is thevarianceofthefractionalrank.TheOLSestimateofβisa n estimateoftheconcentrationindexequivalenttothatobtainedfromequation(3)

𝑟𝑟 𝑖𝑖 = 𝑛𝑛 ∑ 𝑗𝑗=1 𝑤𝑤 𝑗𝑗 + 2 𝑤𝑤 𝑖𝑖 (4) wherewiisthesampleweightscaledtosumto1,observationsaresortingin ascendingorderoflivingstandards,andw0=0.Thevariance𝜎𝜎 2 and𝜇𝜇ofthe fractionalrank,dependsonlyonthesamplesizeandsohasnosamplingvariability, sowechange(3)tomodel:

Becausea K a k w a n i i n d e x i s t h e d i f f e r e n c e b e t w e e n a c o n c e n t r a t i o n i n d e x a n d a Gin i index,bothofwhichcanbecomputedbytheconvenientregressionm ethod,i t s valuecanbecomputeddirectlyfromoneconvenientregressionofthefollowin gform:

Lorenzdominanceanalysisisthemostgeneralwayofdetectingdeparturesf r o m proportionalityandidentifyingtheirfactorsinthe distributionofabilitytopay.T h i s studyappliestheKakwaniindex(Kakwani,1977 ),whichisthemostwidelyused s u m m a r y m e a s u r e o f progressivityi n both thetax and thehealth financel i t e r at u r e s (Wagstaffandothers,1992,1999;O’Donnellandothers,2005)

Gpre,whereCpayi stheco n c e n t r a t i o n indexforhealthpaymentsandGprei stheGinicoe fficientoftheATPv ar i abl e ThevalueofπKrangesfrom–

2to1.Anegativenumberindicatesregressivity;Lpay(p)liesinsideLpre( p ) Apositiven umberindicatesprogressivity;Lpay(p)liesoutsideLpre(p).Seemoredetailedin2.4

Wagstaff,Doorslaer,andWatanabe(2003)demonstratethatthehealthcon centration indexcanbedecomposedintothecontributionsofindividualfactorsto i ncome- relatedhealthinequality,inwhicheachcontributionistheproductofthesensitivityo f h e a t h w i t h r e s p e c t t o t h a t f a c t o r a n d t h e d e g r e e o f i n c o m e - r e l a t e d in eq u al i ty inthatfactor.Foranylinearadditiveregressionmodelofhealth(y),s ucha s

Data

ThestudyreliesondatafromthemostrecentVHLSS,whichwereconductedbyt h e G e n e r a l S t a t i s t i c a l O f f i c e o f V i e t n a m (G SO ) w i t h t e c h n i c a l s u p p o r t fromthe WorldBank(WB)intheyear2012andyear2010.The2012,VHLSScovered9320h o u s e h o l d s The2010,VHLSScovered9179households,respectively.Thesamplesa r e represen tativeforthenational,ruralandurban,andregionallevels.

The surveys collected data through household and community-level questionnaires, focusing on essential demographics, education, health, income, and expenditure Key metrics included per capita income and expenditure, gathered through detailed inquiries Additionally, the surveys provided insights into household health insurance, annual outpatient and inpatient hospital visits, and out-of-pocket expenses for healthcare services However, comprehensive data on out-of-pocket payments is lacking, as these payments encompass not just treatment fees but also associated costs like bonuses for doctors, service charges for additional medications, equipment, and transportation (Nguyen, 2012).

Variables

Inmanyresearchesu s e d th e h o u s e h o l d surveydatao f WorldB a n k , t h a t wr it er s often usethesocio- ecomomicvariblestoanalyzetheproblems.So,Ialsousethesev a r i a b l e s inmythesiswh enanalyzinginequityinhealthcarefinanceinVietnam.

1)Genderofhouseholders2)Ag eofhouseholders3)Educatio nofhouseholders4)Ethnicity ofhouseholders

ExplanatoryVariables Mean Min Max Mean Min Max

TotalExpenditureforfoodandnon-food 69,359 1,539 755,853 34,614 1,926 363,197 TotalExpenditureforfood,non-food, andhealthcare 74,944 2,413 698,185 38,086 2,186 368,941

VietnamHealthCareSystem

1 4 , t h e populationo f V i e t Nam is 8 9 7 1 millionp e o p l e (WorldBa n k d a t a ) Wi thsu c h a l a r g e p o p u l a t i o n , V i e t N a m r a n k s t h i r d i n South-

East Asia ranks thirteenth in the world in terms of total population size, with approximately 69% of its inhabitants residing in rural areas (GSO, 2009) In 2014, the gross domestic product (GDP) was reported at US$1,910 per capita (WB data) Vietnam has made significant advancements in healthcare even prior to being classified as a middle-income country By 2005, its age-specific death rates were comparable to those of wealthier Malaysia across all age groups The healthcare administration in Vietnam operates on a three-level system: the Ministry of Health (MOH) at the tertiary level, which is the main national authority responsible for health policy and programs; 64 provincial health bureaus at the provincial level that implement MOH policies while being part of local government; and the primary level, which consists of district health centers, commune health stations, and village health workers.

DeliveryofHealthcare

Vietnam's healthcare system comprises both public and private services, with the government delivering healthcare through public hospitals and clinics nationwide These services encompass outpatient care, preventive measures, and health promotion, primarily managed by the Ministry of Health (MOH), which oversees primary, secondary, and tertiary care across various facilities, including general and district hospitals As of 2013, there were 1,035 MOH hospitals with a total of 283,000 beds, equating to 25.5 patient beds per 10,000 inhabitants The public health sector employs an open-door policy for general outpatient services and hospital admissions, although access to specialist services is regulated through a national referral system Specialist care is available at designated hospitals, including national referral hospitals and selected district hospitals, with patients referred to the nearest facility if they cannot be treated at general outpatient centers The government heavily subsidizes public health services to ensure accessibility.

FinancingofHealthCare

Likethehealthfinancingsystemsofothersocialistcountriesinthepast,VietNam’sh e a l t h f i n a n c i n g h a s b e e n b a s e d o n g e n e r a l governmentr e v e n u e T h e h e a l t h c a r e s y s t e m hasbeensuccessfulindevelopingahealth- carenetworkthatprovidesfreep r i m a r y healthcareandreferralcareservicestoallcitize ns.

DuetothereformsduringtheimplementationoftheDoiMoipolicies,VietNa mhealthfinancingmadeatransitionfrom atax- basedsystemtoasystemwithmultiples o u r c e s o f financing.T o d a y , t h e m a j o r s o u r c e s o f f i n a n c i n g a r e g e n e r a l governmentrevenues,

SHIfunding,andOOPpaymentsof households.Otherminors o u r c e s areexternalaid,overseasdevelopmentassis tanceandprivatehealthinsurance(Figure8).WorldHealthStatictis(2013)d escribestheexpendituresforhealthintwoperiods:year2000andyear2010.SeeTable below:

%ofgeneralgovernmentexpenditureonhealth 19.7 38.4 % Out-of-pocketexpenditure as%ofprivateexpenditureonhealth

Out-of-pocket (OOP) payments for healthcare services are a crucial indicator for evaluating equity within health systems, particularly in health financing OOP refers to the direct expenditures households incur when accessing services, which primarily include the purchase of medications, hospital user fees, diagnostic service fees, and other indirect costs associated with seeking medical care at both state and private facilities, including self-medication.

32 pocketpaymentandabilitytopayforservices.Itisthemostfrequentlyusedyar dsticktoassessthe equityofout-of- pocketpayments.Theequityaspectofahealthfinancingsystemcanbeassessedbyl oo ki ng attherelationbetweenOOPlevelandthehouseholdAbilitytoPay(ATP).

Ahealthpaymentisprogressive(regressive)ifitaccountsforanincreasing(decreasing)p r o p o r t i o n ofATPasATPrises.Aprogressive(regressive)systemmeansthatthei n di v i d u al s orhouseholdswithagreaterATParepayingmore(less)proportionallyi n fi nancinghealthcare.Healthfinancingsystemsareproportionalifindividualsorhouseh oldswithadifferentATParespendingthesameproportionofATPinfi n a n ci n g h ealthcare.

Results

OLSandQuantileRegressionofHouseholdTotalexpenditure

QR_50 QR_75 OLS QR_25 QR_50 QR_75

ExplanatoryVariables b/se b/se b/se b/se b/se b/se b/se b/se

*significant at 10%, **significant at5%, ***significant Standard errorsinbrackets Source: Estimation from panel data of VHLSSs 2012 and 2010

4.4.2 AveragePerhouseholdHealthFinanceandSharesofTotalFinancingTable7s h o w s h o u s e h o l d h e a l t h f i n a n c i n g a n d t o t a l e x p e n d i t u r e byq u i n t i l e , w i t h ho useh olds r a n k e d i n a s c e n d i n g o r d e r o f t o t a l e x p e n d i t u r e F o r e a c h q u i n t i l e , t h e f ir st columndisplaystheaveragehouseholdtotalexpenditureincludinghe althcarepayments.Theothercolumnsshowthesameinformationforeachsourceofhe althf i n a n c e alongwithtotalhealthfinancing.Allfinancingandconsumptionvar iablesareexpressedintermsofvaluesperhouseholdinordertotakeeconomiesofsc alein to account.Thelastlineprovidesinformationforthewholepopulation.

Inyear2012,thefirstcolumninTable7showsthatthepoorestquintileconsumes,o n av e r a g e L o w e s t q u i n t i l e c o n s u m e s 2 6, 3 2 1 a n d t h e r i c h e s t co n s u m es 1

5 7 , 4 0 0 Whenthepopulationistakenasawhole(lastlineoftheTable),equival entgrossco n su mp t io n amountsto74,944.Theaveragefinancingincreaseswit hquintileforallothersourcesoffinancing,

The data in Table 7 indicates a significant disparity in expenditure among different income quintiles, with the poorest quintile accounting for only 6.8% of total expenditure compared to 40.9% for the richest Inpatient expenditure is predominantly borne by the wealthiest, as the first three quintiles contribute only 5.9%, 1%, and 14.2% on average, while the last two quintiles account for 22.6% and 49.1%, respectively Although the financing share increases across quintiles for other sources of funding, the differences are generally less pronounced than for inpatient expenditure Notably, the richest quintile contributes 32.5% to insurance, which is more than five times the 5.8% contributed by the poorest quintile.

Inyear2010,thefirstcolumninTable7showsthatthepoorestquintileconsumes,o n a v e r a g e L o w e s t q u i n t i l e c o n s u m e s 1 4 , 3 7 3 a n d t h e r i c h e s t c o n s u m e s 8 0 , 3 9 6 Whenthepopulationistakenasawhole(lastlineoftheTable),equivalentgrossc o n su m p t i o n amountsto38,094.Theaveragefinancinginc reaseswithquintileforallothersourcesoffinancing,

ThesecondpartofTable6showsthatthepoorestquintileconsumes,onaverage, 7.3percentoftotalexpenditure,whereasthisamountsto40.6percentfortherichest.Inpatien texpenditure ap p e a r s tobe b o r n e mostlybytherichest, as t h e firstthree qu in t il escontributeonly4.3,7.8,and12.7percent,onaverage,whereasthelasttwoc o n t r i b u t e 2

2 1 a n d 5 3 1 p e r c e n t , r e s p e c t i v e l y T h e f i n a n c i n g s h a r e i n c r e a s e s b yquintile f o r a l l o t h e r s o u r c e s o f f i n a n c i n g , b u t d i f f e r e n c e s a r e , i n g e n e r a l , l e s s markedthanforinpatientexpenditure.Inthecaseofinsurance ,therichestquintile( 3 5 3 percent)contributesaboutfivetimesasmuchasthepoorestone(7. 3percent).

Table 8 analyzes the progressivity of health financing by presenting average expenditure and financing shares across quintiles, ranked by total expenditure (ATP: ability to pay) The expenditure data highlights income inequality, indicating that a higher share of expenditure among the wealthiest quintiles correlates with greater inequality Additionally, the sources of financing reveal which segments of the income distribution contribute to health financing; a larger share from the richest quintiles suggests a more concentrated and pro-rich financing structure.

Table 8 presents key measures of financing concentration and progressivity The financing concentration index indicates the relationship between financing and ATP, with positive values showing that wealthier individuals contribute a larger share of financing compared to poorer individuals, indicating pro-poor financing Conversely, negative values suggest the opposite An index value close to zero signifies no correlation between income and financing The Kakwani index, a crucial component of this table, measures financing progressivity by calculating the difference between the concentration index and the gross consumption Gini index A positive Kakwani index indicates that financing is more concentrated among the rich, reflecting progressivity Essentially, as ATP increases, the share of the financing budget—financing divided by ATP—also rises.

Inyear2 0 1 2, a ll c o n c e n t r a t i o n in de xes a r e p o s i t i v e , in di cat in gt ha tt he be t t e r of f c o n t r i b u t e a b s o l u t e l y moret o t h e f i n a n c i n g o f h e a l t h c a r e t h a n d o t h e p o o r T h e concentrationindexislargestforinpatients(0.4122)andsmall estforsocialinsurancecontributions(0.2696),suggestingthatinpatientsarethemostpro gressivean dsocialinsurancecontributionsaretheleastso.

TheK a k w a n i i n d e x e s forb o t h i n p a t i e n t s ( 0 0 6 8 1 ) a n d O u t - o f - p o c k e t p a y m e n t ( 0 0 0 5 4 ) arepositive,indicatingprogressivity.TheKakwaniind exisverycloseto0 forf o o d payments, t o t a l e x p e n d i t u r e f o r d a i l y a c t i v i t y an d t o t a l e x p e n d i t u r e f o r h e a l t h , andism od era te ly negativeforoutpatient (-

Inyear2010,allconcentrationindexesalsoarepositive,indicatingthatthebet teroffcontributeabsolutelymoretothefinancingofhealthcarethandothepoor.Thec oncentration i n d e x i s a l s o l a r g e s t f o r i n p a t i e n t s ( 0 4 4 2 1 ) a n d s m a l l e s t f o r s o c i a l insurance contributions(0.3021),suggestingthatinpatientsarethemostprogres siveand socialinsurancecontributionsaretheleastso.

TheK a k w a n i i n d e x e s forb o t h i n p a t i e n t s ( 0 1 0 2 5 ) a n d O u t - o f - p o c k e t p a y m e n t ( 0 0 7 1 5 ) arepositive,indicatingprogressivity.TheKakwaniind exisverycloseto0forf o o d payments.L i k e t h e r e s u l t s a s 2 0 1 2 , i n 2 0 1 0 t h e s o c i a l i n s u r a n c e co n t r i b u t i o n s (-0.0375),foodpayments(-

0.0182),indicating regressivity Bu tmod erat ely possitiveforoutpatient(0.0701),indicatingprogressivity

Equivalenthousehold Equivalent Total expenditurequintile household expenditure Inpatient

OOP Insurance Totalexpendi ture Food Non-Food payments premiums fordailya c ti v i t y payments payments

Equivalenthousehold Equivalent Total expenditurequintile household expenditure Inpatient Outpatient expenditure forhealth

OOP Insurance Totalexpen diture Food Non-Food payments premiums fordaily a c ti vi t y payments payments

Authoroft hi s studyuseequation( 11 ) suggested byWagstaff,vanDoorsla er,an d Watanabe( 2 0 0 3 ) t o d e c o m p o s e A T P ( t o t a l e x p e n d i t u r e ) i n e q u a l i t y o f h o u s e h o l d s Vietnam in2012an d 2 01 0 A s u m m a r y oft h e result si s presented in T a b l e 9 T h e e n t r i e s i n e a c h c o l u m n a r e d e r i v e d f r o m e q u a t i o n ( 1 1 ) a n d g i v e t h e elasticityoftotalexpenditures(ATP)withrespecttoeac hfactor,theconcentrationindexforeachfactor,andthetotalcontributionofeach factortotheATPconcentrationindex.

TheresultsarepresentedinTable9,bothyear2012and2010.Thelargeelast icities o f A T P w i t h r e s p e c t t o t h e s e f a c t o r s a r e r e s p o n s i b l e f o r t h e i r l a r g e contributiontotheATPconcentrationindex.

Inyear2012,foodandnon- foodexpenditurehavethelargestelaticities,elasticities0 772and 0 1 6 2 , c ontribute mosti n e q u a l i t y inATP, 0 2 66 and0 05 4, makehighestshareofcont ributions,77.25%and15.72%.Outpatientandinpatienth a v e s h a r e o f c o n t r i b u t i o n s 2 4 1 % a n d 3 2 4 % e v e n t h o u g h theyh a v e h i g h con cen trat io n ind icesbecausetheyhaveverylowelasticities

0 6 8 , c o n t r i b u t e mosti n e q u a l i t y i n A T P , 0 2 2 6 5 a n d 0 0 7 7 1 , ma kehighestshare ofcontributions,66.72% and22.70%.Outpatient andinpa tienthaveshareofcontributions4.22%and4.63%eventhoughtheyhavehighc o n c e n t r a t i o n indicesbecausetheyhaveverylowelasticities

A u t h o r onlyusesf in anc in gv ar ib les in hea lt hca re toa na lyz e, n ot i n c l u d i n g f oo d an d n o n - f o o d e x p e n d i t u r e A s u m m a r y oft h e r e s u l t s i s p r e s e n t e d inT a b l e 9 T o an alyzemoredetailed,drugs,healthtoolsexpensealsousedinthisstudy.

Inyear2012,outpatientandinpatienthavehighestelasticities,0.3756and0.39 92.Nextisdrugsexpenditure,0.1505.So,contributionsofinpatientando u t pa t i e n t ininequalityaretoohigh.Thelastcolumnistheshareofcontributionini n e q u a l i t y ofh ealthcareexpenditure.

Inyear2010,outpatientandinpatientalsohavehighestelasticities,0.3961 and0.4025.Nextisdrugsexpenditure,0.1506.So,contributionsofinpatientandou tp ati ent ininequalityaretoohigh Thelast columnis alsot he shareofc o n t r i bu t io n in inequality of healthcare expenditure

Elast CIs Contribution ShareofCo ntributions Elast CIs Contribution ShareofCon tributions

Elast CIs Contribution ShareofCon tributions Elast CIs Contribution ShareofCo ntributions

Concentration Curves for Health Payments and Lorenz Curve for Household Expenditure

Figure 9:Social Insurance Contribution, Inpatient and Outpatient payments, Out-of-pocket for health care

Figure9 p r e s e n t s t h e L o r e n z c u r v e f o r h o u s e h o l d t o t a l e x p e n d i t u r e g r o s s o f h e a l t h paymentsalongwiththeconcentrationcurve fore achsourceofhouseholdhealthf i n a n c i n g , year2 0 1 2 I t s h o w s h o u s e h o l d SocialI n s u r a n c e C o n t r i b u t i o n , I n p a t i e n t andOutpatientpayments,Ou t-of-pocketforhealthcare

TheLorenzcurveshowsthecumulativeshareofconsumptionaccordingtothecu mulatives h a r e o f p o p u l a t i o n r a n k e d i n a s c e n d i n g o r d e r o f c o n s u m p t i o n F o r i n s t a n c e , only2 0 p e r c e n t o f t o t a l c o n s u m p t i o n mightc o m e fromt h e p o o r e s t 3 0 p e r c e n t o f t h e p o p u l a t i o n T h i s c u r v e p r o v i d e s u s w i t h a v i s u a l r e p r e s e n t a t i o n o f h o u s e h o l d inequality: thefartherthecurvei sfrom the45°line,the greater isthe inequality.

Theconcentrationcurvesrepresent thecumulativeshareof healthpayments according tothecumulativeshareofpopulation,againrankedinascendingorderofco n su mp t io n Forinstance,thepoorest30percentmightcontributeonly10percentto s o c i a l i n s u r a n c e T h e s e c u r v e s s h o w h o w h e a l t h f i n a n c i n g v a r i e s a c c o r d i n g t o con sumption:thefartheracurveisfromthe45°line,themorethecorrespondings ource offinancingisbornebytherichesthouseholds.Forsomesourcesoffinancing, t h e c o n c e n t r a t i o n c u r v e mightl i e a b o v e t h e 4 5 ° l i n e I n s u c h c a s e s , paymentsaremoreconcentratedamongthepooresthouseholds.

Furthermore,t h e s e g r a p h s o f f e r a p o w e r f u l meanso f r e p r e s e n t i n g t h e e f f e c t ofh e a l t h financingonthedistributionofhouseholdlivingstandards.Indeed,when everac o n c e n t r a t i o n c u r v e l i e s o u t s i d e t h e L o r e n z c u r v e , t h i s i n d i c a t e s progressivity.H o w e v e r , aformaltestofstatisticaldominanceisrequiredtoc oncludethisdefinitively(seeO’Donnellandothers2008,ch.7).

TheResultsarepresentedingraphFigure9.IngraphFigure9,theconcentrati oncurv es forinpatientsappeartolieoutsidetheLorenzcurve,suggestingthatt hisisp r o g r e s s i v e s o u r c e s o f f i n a n c e T h e c u r v e f o r t h e s o c i a l i n s u r a n c e a p p e a r s t o l i e insid etheLorenzcurvesuggestsregressivityfortherichesthou seholds.However,t h e gapbetweentheconcentrationandLorenzcurvesisneverwide.

Figure 1 illustrates the average budget share of out-of-pocket health payments, calculated as health payments divided by total expenditure, segmented by quintiles of total consumption This representation highlights the progressivity of health payments, indicating that they are progressive if the share of household consumption increases with consumption levels Conversely, health payments are considered regressive if their share decreases as consumption rises If the budget share remains constant regardless of consumption, health payments are proportional to income.

DistributionalIncidenceofSourcesofHouseholdHealthFinance

Table 8 analyzes the progressivity of health financing by presenting average expenditure and financing shares by quintile, with households ranked in ascending order of total expenditure (ATP: ability to pay) The expenditure information highlights income inequality, indicating that a larger share of spending by the wealthiest quintiles correlates with greater inequality Additionally, the sources of financing reveal which segments of the income distribution contribute to health financing; a higher share from the richest quintiles suggests that financing is more concentrated among the wealthy, indicating a pro-rich bias in health financing.

Table 8 presents key measures of financing concentration and progressivity The financing concentration index indicates the relationship between financing and ATP, with a positive value suggesting that wealthier individuals contribute a larger share of financing compared to poorer ones, signifying pro-poor financing Conversely, a negative value indicates the opposite scenario An index value close to zero suggests no significant correlation between income and financing The Kakwani index, a crucial metric in this table, measures financing progressivity by assessing the difference between the concentration index and the gross consumption Gini index A positive Kakwani index indicates that financing is more concentrated among the wealthy, reflecting progressivity Additionally, progressivity can be understood as an increase in the financing budget share, which is the financing amount divided by ATP, as ATP rises.