Health Policy and Planning Advance Access originally published online on September 2, 2006
Health Policy and Planning 2006 21(6):421-431; doi:10.1093/heapol/czl026
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Detecting changes in financial protection: creating evidence for policy in Estonia
1World Health Organization (WHO) Country Office in Estonia, WHO Regional Office for Europe, Tallinn, Estonia, 2Health Systems Financing, EIP/WHO, Geneva, Switzerland and 3Health Systems Financing Programme, WHO Regional Office for Europe, Copenhagen, Denmark
Correspondence: Jarno Habicht, WHO Country Office, Gonsiori 29, Tallinn 15027, Estonia. E-mail: jha{at}who.org.ee
Ninety-four per cent of the Estonian population is covered by public health insurance, but private expenditure has been increasing quickly both in real terms and as a percentage of total health expenditure. To date, little attention has been given to the impact this could have on the population's financial protection. Out-of-pocket payments, which account for the bulk of the private expenditure in many low- and middle-income countries, can push people into poverty and more generally represent too high a burden for some households. It is therefore very important that governments monitor the impact of out-of-pocket payments on health. Using an example from Estonia, this paper aims to illustrate that, if household budget survey data are available, monitoring a population's financial protection is not a complex undertaking. Further, by combining simple statistical analyses of these data with a good knowledge of a country's health system, it is possible to give a fairly detailed diagnostic of the nature of the population's coverage limitation. This allows for the presentation of easily interpretable results that can raise awareness among policy-makers and help to target adequate policy responses.
Using Estonian household budget surveys from 1995, 2001 and 2002, we show that the proportion of households who spend more than 20% of their capacity to pay on health increased from 3.4% in 1995 to 7.4% in 2002 and that in 2002, 1.3% of the population fell into poverty because of health payments. Logistic regression helps in identifying the population most at risk: elderly patients who belong to poor households and spend high amounts on medicines. This study, which can be replicated, did raise awareness among policy-makers about the changes in financial protection over the years in Estonia.
Key Words: out-of-pocket payments, financial protection, Estonia, health system, health care services, equity
1In their analysis of Indonesian health care utilization and expenditure data, Pradhan and Prescott (2002) note that conventional survey-based measures of exposure to catastrophic financial risk understate the actual risk faced by poorer households that do not seek care because of its cost (and thus reported zero health expenditures in the survey).
2Data are only available from 1996 on, and are not official for the first 2 years, as the National Health Account (NHA) system was launched in Estonia in 1998.
3The first (decline in public spending on health) perhaps induced the second (increased co-payments).
4Ignoring the fact that the authors of the different papers do not use the same measures of the burden as ours.
5More detailed explanations about how to compute these measures can be found on the World Bank website [http://www.worldbank.org] under Topics; Poverty and Health; Publications; Quantitative Techniques for Health Equity Analysis: Technical Notes.
6This conclusion has to be true unless the funding of the prepaid part of the health system became much more equitable during the same period. Although we cannot measure this from the available data, there is no reason to believe that there was any significant change in the distribution of payroll and other tax contributions for health.
7Some numbers may appear not to add up due to rounding.
8Depth of coverage is the extent to which services are covered from prepaid, pooled sources (i.e. available without out-of-pocket co-payment). The other dimension of coverage is breadth, which is the proportion of the population that is ‘covered’, i.e. has some degree of protection against the costs of care from prepaid sources. In other words, ‘depth’ refers to service coverage, whereas ‘breadth’ refers to population coverage (see Kutzin 1999, 2000).
9At the same time, it is important to keep in mind that improvements of the populations’ financial protection can be achieved by other means than decreases in co-payment rates, for instance, by influencing physicians’ prescription practices through guidelines or by encouraging the development and use of generics. Disease management programmes could also be used to address both quality and cost issues for the chronically ill.
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