Health Equity and Financial Protection Wagstaff, Bilger, Sajaia, and Lokshin STREAMLINED ANALYSIS WITH ADePT SOFTWARE www.worldbank.org/adept Two key policy goals in the health sector are equity and fi nancial protection. New methods, data, and powerful computers have led to a surge of interest in quantitative analysis that permits the monitoring of progress toward these goals, as well as comparisons across countries. ADePT is a new computer program that streamlines and automates such work, ensuring that the results are genuinely comparable and allowing them to be produced with a minimum of programming skills. This book provides a step-by-step guide to the use of ADePT for the quantitative analysis of equity and fi nancial protection in the health sector. It also elucidates the concepts and methods used by the software and supplies more- detailed, technical explanations. The book is geared to practitioners, researchers, students, and teachers who have some knowledge of quantitative techniques and the manipulation of household data using such programs as SPSS or Stata. “During the past 20 years, an increasingly standardized set of tools have been developed to analyze equity in health outcomes and health fi nancing. Hitherto, the application of these analytical methods has remained the province of health economists and statisticians. This book and the accompanying software democratize the conduct of such analyses, offering an easily accessible guide to equity analysis in health without requiring sophisticated data analysis skills.” Sara Bennett, Associate Professor, Department of International Health, Bloomberg School of Public Health, Johns Hopkins University, Baltimore, Maryland, United States “As the international health community becomes increasingly focused on monitoring the impact of universal coverage initiatives, ADePT Health will help make the standard techniques more accessible to policy makers and analysts, increase the comparability of health equity and fi nancial protection measures, and aid in generating the evidence needed to support policy.” Kara Hanson, Reader in Health System Economics, Health Policy Unit, London School of Hygiene and Tropical Medicine, United Kingdom “The ADePT software and manual make it possible for researchers without extensive statistical training to perform a range of analyses that will provide an important evidence base for introducing universal coverage reforms and for monitoring if these reforms are achieving their objectives. The ADePT initiative is an exciting and timely development that will enable researchers in low- and middle-income (as well as high-income) countries to undertake health and health system equity analyses that would previously have been lengthy and extremely resource intensive.” Di McIntyre, Professor, School of Public Health and Family Medicine, University of Cape Town, South Africa Streamlined Analysis with ADePT Software is a new series that provides academics, students, and policy practitioners with a theoretical foundation, practical guidelines, and software tools for applied analysis in various areas of economic research. ADePT Platform is a software package developed in the research department of the World Bank (see www.worldbank.org/adept). The series examines such topics as sector performance and inequality in education, the effectiveness of social transfers, labor market conditions, the effects of macroeconomic shocks on income distribution and labor market outcomes, child anthropometrics, and gender inequalities. Health Equity and Financial Protection Adam Wagstaff Marcel Bilger Zurab Sajaia Michael Lokshin ISBN 978-0-8213-8459-6 SKU 18459 Health Equity and Financial Protection Health Equity and Financial Protection Adam Wagstaff Marcel Bilger Zurab Sajaia Michael Lokshin STREAMLINED ANALYSIS WITH ADePT SOFTWARE © 2011 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org All rights reserved 1 2 3 4 14 13 12 11 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www .copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org. ISBN: 978-0-8213-8459-6 eISBN: 978-0-8213-8796-2 DOI: 10.1596/978-0-8213-8459-6 Cover photo: © Shehzad Noorani /World Bank (woman and child); © iStockphoto.com/Olga Altunina (background image) Cover design: Kim Vilov Library of Congress Cataloging-in-Publication Data has been requested. v Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xv Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xvii Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xix Chapter 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 PART I: Health Outcomes, Utilization, and Benefit Incidence Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Chapter 2 What the ADePT Health Outcomes Module Does . . . . . . . . . . . . . . . . .5 Measuring Inequality in Outcomes and Utilization . . . . . . . . . . . . . . . . . . . . .5 Basic Inequality Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Standardization for Demographic Factors* . . . . . . . . . . . . . . . . . . . . . . . . .7 Accounting for Inequality Aversion* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Trading Off the Average against Inequality* . . . . . . . . . . . . . . . . . . . . . . . .8 Explaining Inequalities and Measuring Inequity* . . . . . . . . . . . . . . . . . . . . . .8 Contents vi Benefit Incidence Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Basic BIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 BIA under Alternative Assumptions* . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 Chapter 3 Data Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Household Identifier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Living Standards Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 Direct Approaches to Measuring Living Standards . . . . . . . . . . . . . . . . . .16 Indirect Approaches to Measuring Living Standards . . . . . . . . . . . . . . . .17 Health Outcome Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Child Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Anthropometric Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Other Measures of Adult Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Health Utilization Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Variables for Basic Tabulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Weights and Survey Settings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Determinants of Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21 Determinants of Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Information on Utilization for Benefit Incidence Analysis . . . . . . . . . . . . . .22 Fees Paid to Public Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 NHA Aggregate Data on Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 Chapter 4 Example Data Set . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 Household Identification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 Living Standards Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 Health Outcome Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 Health Utilization Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 Variables for Basic Tabulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Weights and Survey Settings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Determinants of Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Determinants of Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Utilization Variables for Benefit Incidence Analysis . . . . . . . . . . . . . . . . . . .30 Contents vii Fees Paid to Public Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 NHA Aggregate Data on Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 Chapter 5 How to Generate the Tables and Graphs . . . . . . . . . . . . . . . . . . . . . . .33 Main Tab . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 Determinants of Health or Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 Benefit Incidence Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 Chapter 6 Interpreting the Tables and Graphs . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 Original Data Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42 Basic Tabulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Inequalities in Health Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46 Concentration of Health Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 Explaining Inequalities in Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Decomposition of the Concentration Index . . . . . . . . . . . . . . . . . . . . . . . . . .54 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Inequalities in Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Explaining Inequalities in Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Contents viii Use of Public Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 Payments to Public Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Health Care Subsidies: Cost Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64 Concentration of Public Health Services . . . . . . . . . . . . . . . . . . . . . . . . . . . .66 Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66 Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69 Chapter 7 Technical Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71 Measuring Inequalities in Outcomes and Utilization . . . . . . . . . . . . . . . . . . .71 Note 1: The Concentration Curve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71 Note 2: The Concentration Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72 Note 3: Sensitivity of the Concentration Index to the Living Standards Measure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75 Note 4: Extended Concentration Index . . . . . . . . . . . . . . . . . . . . . . . . . . .77 Note 5: Achievement Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78 Explaining Inequalities and Measuring Inequity . . . . . . . . . . . . . . . . . . . . . . .79 Note 6: Demographic Standardization of Health and Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79 Note 7: Decomposition of the Concentration Index . . . . . . . . . . . . . . . . .82 Note 8: Distinguishing between Inequality and Inequity . . . . . . . . . . . . . .83 Benefit Incidence Analysis (BIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84 Note 9: Public Health Subsidy in Standard BIA . . . . . . . . . . . . . . . . . . . .84 Note 10: Public Health Subsidy with Proportional Cost Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86 Note 11: Public Health Subsidy with Linear Cost Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89 Contents [...]... areas of health equity and financial protection This manual is divided into two parts corresponding to each of these submodules The following topics are covered: • Part 1, Health Outcomes: (a) measuring inequalities in outcomes and utilization (with and without standardization for need), (b) decomposing the causes of health sector inequalities, and (c) analyzing 1 Health Equity and Financial Protection. .. hope that ADePT will be valuable to more technically inclined researchers too, by speeding up the production of results and by increasing their reliability and comparability The present book provides a guide to ADePT s two health modules: the first module covers inequality and equity in health, health care utilization, and subsidy incidence; the second, health financing and financial xv Foreword protection. .. tradition of developing and applying methods for the analysis of poverty and inequality, often working with collaborators And the Bank’s researchers have often tried hard to make their methods accessible to others, through “how-to” guides and training courses In that tradition, this book is the first in a new series called Streamlined Analysis with ADePT Software ADePT is an exciting new software tool developed... Utilization, and Benefit Incidence Analysis Chapter 2 What the ADePT Health Outcomes Module Does The Health Outcomes module of ADePT Health allows users to analyze inequalities in health, health care utilization, and health subsidies, by income or any continuous (though not necessarily cardinal) measure of living standards or socioeconomic status In what follows, “income” is often used as shorthand for... (that is, benefit incidence analysis) • Part 2, Health Financing: (a) financial protection, including catastrophic payments and impoverishing payments, and (b) the progressivity and redistributive effect of health financing Each part is divided into six chapters: • Chapters 2 and 8 explain what ADePT does in each area and provide a brief introduction to the methods underlying ADePT The methods are widely...Contents PART II: Health Financing and Financial Protection 93 Chapter 8 What the ADePT Health Financing Module Does 95 Financial Protection 96 Catastrophic Health Spending 96 Poverty and Health Spending 98 Progressivity and Redistributive Effect ... Utilization ADePT allows users to analyze differences in health outcomes or health care utilization across any subpopulation However, the software s strength lies in its ability to analyze inequalities in health outcomes and utilization by income or by some other measure of living standards 5 Health Equity and Financial Protection: Part I Basic Inequality Analysis In addition to producing tables showing the... than the better off, and people’s health inevitably worsens with age; standardization provides a way to remove this inescapable component of health inequality.3 ADePT implements both the direct and indirect methods of standardization and allows users to decide whether to include only justified influences in the standardization or both justified and unjustified influences, albeit standardizing just for... Wagstaff (2010) extends the analysis in O’Donnell and others (2008) References Fleurbaey, M., and E Schokkaert 2009 “Unfair Inequalities in Health and Health Care.” Journal of Health Economics 28 (1): 73–90 Gravelle, H 2003 “Measuring Income-Related Inequality in Health: Standardisation and the Partial Concentration Index.” Health Economics 12 (10): 803–19 Hammer, J., I B Nabi, and J Cercone 1995 “Distributional... in health No standardization Standardization and decomposition* Inequalities in utilization No standardization Standardization and decomposition* Benefit incidence analysis Constant unit subsidy assumption Other assumptions* ✓ ✓ Need indicators Health and other utilization utilization variable(s) determinants Fees paid to public providers ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Source: Authors Note: * ϭ A more advanced and . Health Equity and Financial Protection Wagstaff, Bilger, Sajaia, and Lokshin STREAMLINED ANALYSIS WITH ADePT SOFTWARE www.worldbank.org /adept Two. 18459 Health Equity and Financial Protection Health Equity and Financial Protection Adam Wagstaff Marcel Bilger Zurab Sajaia Michael Lokshin STREAMLINED ANALYSIS