Improving the Measurement of
Financial Protection in
Health Systems
Dr Rodrigo Moreno-Serra
Centre for Health Policy, Imperial College London
r.moreno-serra@imperial.ac.uk
PCPH, Imperial College London, 5th October 2011
Background
• Financial protection (FP): extent to which
people are protected from the financial
consequences of illness
– Key objective of health care (HC) systems,
multidimensional
– Financial hardship and lack of access to HC due to
costs still widespread (WHR 2010)
– FP may suffer in a context of economic downturn
– Monitoring FP is crucial for sound health policy
FP measurement: where are we?
• Focus on households’ living standards before
and after direct payments for health (OOPs)
• OOPs reported in household surveys
Catastrophic spending
– OOPs cross set threshold in terms of share of
disposable income
Impoverishing spending
– OOPs push household income below a chosen
poverty line
FP metrics: criticisms
1. Measurement of capacity to pay, effects of
lost income etc...
2. Effect of financial barriers to access: the
elephant in the room
– Ability to pay may deter access to necessary HC
– Linked to equity but indicator of FP extent
– Sole focus on incurred spending may provide
misleading picture of FP
Catastrophic spending incidence and DTP3 immunization
coverage among 1 year-olds, 87 countries (various years)
100
DTP3 coverage among 1-year olds (%)
Ukraine
US
UK
Russia
Vietnam
Portugal
90
Greece
Canada
Tanzania
China
Colombia
80
Georgia
Nicaragua
Bolivia
S. Africa
70
Malawi
Tajikistan
Brazil
Azerbaijan
Kenya
Indonesia
India
Nepal
Côte d'Ivoire
60
Uganda
Lao PDR
Cambodia
Yemen
50
Djibouti
40
0
1
2
3
4
5
6
7
8
9
10
11
Catastrophic health spending incidence (%)
Source: Immunization data from WHO. Catastrophic spending incidence data from Xu et al. (2007). Financial
catastrophe is defined as OOPs for health reaching at least 40% of a household’s non-subsistence income.
12
Financial barriers to access in high-income countries
with low incidence of financial catastrophe
Had problems with access because of cost (%)
35
30
25
20
15
10
5
0
Source: IHPS, Commonwealth Fund (Schoen et al. 2010).
Financial Protection Measures:
Suggested Areas for Development
I. Complementing conventional
FP indicators
• Coverage indicators
–
–
–
–
WHR 2010
Generally feasible route
But often limited information available
Role of various other determinants of coverage levels
• Access surveys
– E.g., IHPS (Commonwealth Fund), World Health
Surveys (WHO), LSMS (World Bank)
– Need implementation on routine and comparable
basis
II. Improving conventional
FP indicators
• ‘Need-adjusted’ FP metrics
– Estimate expected utilization and OOPs according
to ‘medical need’ characteristics
– Adjust catastrophic and impoverishing spending
incidence (expected incidence)
– May yield very different policy conclusions from
conventional analysis (e.g., Pradhan and Prescott 2002)
– But methodologically challenging
III. An exploratory tool:
Data Envelopment Analysis (DEA)
• Based on economic concept of production frontier
• Through linear programming, find units that achieve
same (or better) outputs at lower use of inputs
• Efficiency = actual/optimal
performance (OQA/OQ1)
• Can examine efficiency
based on multiple outputs
(e.g., FP indicators) and
inputs
DEA applied to FP assessment
• Question: How do developing countries compare
concerning efficiency in ‘producing’ FP given available
resources (constraints)?
• Criteria for efficiency analysis: FP indicators relative to total
health spending (THE) per capita (input orientation)
• Gets at the issue of achievable FP performance
Financial protection proxy
Protection against catastrophic spending (%)
Mean
Std. Dev.
Countries
96.9
2.7
58
Median immun. coverage (6 vaccines) (%)
84.4
11.8
58
Births attended by skilled personnel (%)
73.6
27.4
58
THE per capita (PPP, constant 2005 US$)
253.49
244.93
58
DEA applied to FP assessment
DEA applied to FP assessment
Concluding remarks
• Financial barriers: distorting effects on
conventional FP assessments
• Despite recent progress, we need better FP
metrics for:
– Policy guidance
– International performance comparisons
• Huge potential gains from a health policy
perspective