6. ACCESS TO CARE
6.3. Burden of out-of-pocket health expenditure
Financial protection through public or private health
insurance substantially reduces the amount that
people pay directly for medical care, yet in some countries the burden of out-of-pocket spending can still
create barriers to health care access and use. Households that have difficulties paying medical bills may
delay or forgo needed health care (Hoffman et al.,
2005; May and Cunningham, in Banthin et al., 2008).
On average across OECD countries, 18% of health
spending is paid directly by patients (see Indicator 7.6
“Financing of health care”).
In contrast to publicly-funded care, out-of-pocket
payments rely on the ability to pay. If the financing of
health care becomes more dependent on out-of-pocket
payments, its burden is, in theory, shifted towards
those who use services more, possibly from high to low
income earners, where health care needs are higher. In
practice, many countries have exemptions and caps to
out-of-pocket payments for lower income groups to
protect health care access. Switzerland, for example,
has a high proportion of out-of-pocket expenditure, but
it has cost-sharing exemptions for large families,
social-assistance beneficiaries and others. There is an
annual cap on deductibles and co-insurance payments
(OECD and WHO, 2006).
The burden of out-of-pocket health spending can be
measured either by its share of total household income
or its share of total household consumption. The
average share varied considerably across OECD
countries in 2007, representing less than 2% of total
household consumption in countries such as the
Netherlands and France, but almost 6% in Switzerland
and Greece (Figure 6.3.1). The United States, with almost
3% of consumption being spent on out-of-pocket health
services, is close to the average. In 2007, 30% of US adults
paid more than USD 1 000 in out-of-pocket medical
costs over the past year, while only 4% of UK adults paid
similar amounts (Figure 6.3.2). In some central and
eastern European countries, the practice of unofficial
supplementary payments means that the level of
out-of-pocket spending may be underestimated.
The distribution of spending across the population can
vary markedly, although data is only available for a
small number of countries. The US Medical Expenditure
Panel Survey found that 28% of Americans living in a
poor family (defined as a family income below the
Federal poverty level) were spending more than 10% of
their after-tax family income for health services and
health insurance premiums in 2004, compared with 10%
of Americans in a high income family (Banthin et al.,
2008). Similarly, 5% of Belgian households in the lowest
146
income decile spent more than 10% of their gross
income on out-of-pocket payments in 1997, compared
to less than 1% of households in the highest decile
(De Graeve and Van Ourti, 2003). In 2004, households in
the lowest income quartile in the Netherlands spent
3.4% of their disposable income on out-of-pocket
payments; in the highest quartile this was 2% (Westert
et al., 2008).
A small proportion of households in OECD countries
face “catastrophic” health expenditure each year,
perhaps as a result of severe illness or major injury.
Catastrophic health expenditure is commonly defined
as payments for health services exceeding 40% of
household disposable income after subsistence needs
are met (Xu et al., 2007). Countries that have a greater
reliance on out-of-pocket health care expenditure tend
also to have a higher proportion of households with
catastrophic expenditure (Figure 6.3.3). In Portugal,
Spain, Switzerland and the United States, rates of
catastrophic spending exceed five per 1 000 people (Xu
et al., 2007). In Mexico, the high level of out-of-pocket
spending resulted in 3.4% of households having
catastrophic health expenditure in 2003; among the
lowest income quintile this rose to 4.7%, and among
uninsured persons it was 5.1% (OECD, 2005c). In some
countries, the imposition of user fees may mean that
lower income households forgo health care altogether,
and thus not use enough services to incur catastrophic
expenditures.
Definition and deviations
Out-of-pocket payments are expenditures borne
directly by a patient where insurance does not
cover the full cost of the health good or service.
They include cost-sharing, self-medication and
other expenditure paid directly by private
households. In some countries they also include
estimations of informal payments to health care
providers. Some households face very high
out-of-pocket payments. Catastrophic health
expenditure is commonly defined as payments
for health services exceeding 40% of household
disposable income after subsistence needs
are met.
Information on of out-of-pocket expenditure is
collected through household expenditure
surveys in a number of OECD countries.
HEALTH AT A GLANCE 2009: OECD INDICATORS © OECD 2009
6. ACCESS TO CARE
6.3. Burden of out-of-pocket health expenditure
6.3.1 Out-of-pocket expenditure as a share of final household consumption, 2007 (or nearest available year)
% of final household consumption
6 5.9 5.9
5
4.6
4.6
4
3.7
3.6
3.6
3.5
3.4
3.2
3.2
3
3.2
3.0
3.0
3.0
2.8
2.8
2.8
2.8
2.6
2.6
2.5
2.3
2.2
1.9
2
1.7
1.6
1.6
1.5
1.4
1.2
1
Sw
it z
er
la
n
Gr d
ee
ce
Ko
re
Sl
ov M a
a k ex i
Re c o
pu
b
B e li c
lg
iu
Po m
r tu
Hu g al
ng
a
No r y
rw
S w ay
ed
e
Fi n
nl
an
d
Sp
ai
Au n
st
ria
It a
ly
OE
Au CD
st
r
De a li a
nm
ar
Un C an k
i te ad
d
a
St
at
es
Ic
el
an
Po d
la
G nd
N e er m
w an
Ze y
al
an
Cz
d
ec Ja
p
h
Re a n
pu
bl
Ir e i c
la
nd
Un
ite Tu
r
d
K i ke y
Lu ngd
xe om
m
bo
ur
g
Ne Fr an
th
ce
er
la
nd
s
0
Source: OECD Health Data 2009.
6.3.2 Out-of-pocket medical costs in the past year,
seven OECD countries, 2007
6.3.3 Catastrophic expenditure and out-of-pocket
payments for health care, late 1990s
% of households with catastrophic expenditure on health care
2.0
More than USD 1 000
No out-of-pocket cost
KOR
R 2 = 0.75
19
Australia
13
MEX
POL
1.5
12
Canada
21
10
Germany
9
1.0
5
Netherlands
HUN
38
10
New Zealand
ITA
12
FIN
0.5
USA
4
United Kingdom
ISL
52
NOR
CZE DEU
30
United States
10
LUX
0
0
CHE
ESP
10
20
30
40
50
60
Percentage of adults
Source: 2007 Commonwealth Fund International Health Policy
Survey.
0
AUT
DNK
CAN
IRL
GBR
10
20
30
40
50
60
Out-of-pocket expenditure as a % of total expenditure on health care
Source: Xu et al. (2007); OECD Health Data 2009.
1 2 http://dx.doi.org/10.1787/720205046358
HEALTH AT A GLANCE 2009: OECD INDICATORS © OECD 2009
147
From:
Health at a Glance 2009
OECD Indicators
Access the complete publication at:
https://doi.org/10.1787/health_glance-2009-en
Please cite this chapter as:
OECD (2009), “Burden of out-of-pocket health expenditure”, in Health at a Glance 2009: OECD Indicators,
OECD Publishing, Paris.
DOI: https://doi.org/10.1787/health_glance-2009-62-en
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