Measuring financial protection: an approach for the WHO European Region

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1 Division of Health Systems and Public Health WHO Regional Office for Europe Measuring financial protection: an approach for the WHO European Region Jon Cylus WHO Barcelona Office for Health Systems Strengthening European Observatory on Health Systems and Policies Dublin, 22 September 2015

2 Netherlands France United Kingdom Luxembourg Slovenia Croatia Denmark Germany Czech Republic Austria EU Sweden Ireland Italy Finland Estonia Romania Belgium Slovakia Spain Poland Greece Portugal Hungary Malta Lithuania Latvia Bulgaria Cyprus 50 Out of pocket expenditure in Ireland is slightly above the EU28 average Out of pocket expenditure as a share of total expenditure,

3 Greece Cyprus Slovakia Croatia Malta Belgium Netherlands Estonia Denmark Bulgaria Finland Italy Germany Portugal France Austria EU Sweden Czech Republic Poland Slovenia United Kingdom Ireland Luxembourg Hungary Romania Spain Latvia Lithuania OOP spending in Ireland increased more than in most EU28 countries since crisis 8 Change in out of pocket share of total expenditure, Unclear whether this is causing financial hardship

4 What is financial protection? The degree to which households are protected from financial risk when ill A key component of universal health coverage Highlighted in regional and global commitments: the Tallinn Charter, World Health Report 2000 and 2010 General approach to measurement: Catastrophic expenditure h = Out of pocket h /Capacity to pay h > threshold (e.g. 40%) Impoverishing expenditure h = Consumption h - out of pocket h < poverty line

5 Financial protection across the globe Out of pocket spending as a share of total spending Source: Xu et al (2003), Household Catastrophic Health Expenditure

6 General idea: Measuring capacity to pay How much does a household have available to spend on health care out of pocket? Capacity to pay h = consumption h subsistence Defining subsistence: WHO Europe approach: Basic food, utilities and rent

Grouping households 1) More impoverished h if oop/ctp h <0 Already poor enough to be below the

oop h <120% of subsistence 4) Not at risk h,mult if exp h - oop h 120% of subsistence 5) No OOP

by OOP OOP pushes a household close to the poverty line but not below Define catastrophic OOPs

who are impoverished or further impoverished by OOPs See: Wagstaff A and P Eozenou (2014), CATA

7 Grouping households 1) More impoverished h if oop/ctp h <0 Already poor enough to be below the subsistence line and spending OOP 2) Impoverished h if oop>ctp h 3) At risk h,mult if exp h - oop h <120% of subsistence 4) Not at risk h,mult if exp h - oop h 120% of subsistence 5) No OOP if no out of pocket OOP does not put a household at risk of impoverishment Becoming impoverished by OOP OOP pushes a household close to the poverty line but not below Define catastrophic OOPs to include both households that spend above a given threshold of their capacity to pay and those who are impoverished or further impoverished by OOPs See: Wagstaff A and P Eozenou (2014), CATA Meets IMPOV: a unified approach to measuring financial protection in health, Washington DC: the World Bank

8 Countries currently preparing new estimates of financial protection

9 Preliminary results based on EU countries that have already prepared new estimates

Slovenia 2007 Ireland 2009 Czech 2009 Cyprus 2009 Greece 2008 Latvia 2008 Estonia 2007 Portugal 2005 Lithuania 2008 Comparing EU countries pre-crisis 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0.

10 Slovenia 2007 Ireland 2009 Czech 2009 Cyprus 2009 Greece 2008 Latvia 2008 Estonia 2007 Portugal 2005 Lithuania 2008 Comparing EU countries pre-crisis 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0.1% 1.1% 1.2% 2.9% 7.4% 10.0% 10.3% 10.6% 11.5% More impoverished by OOP spending Impoverished by OOP spending At-risk of impoverishment after OOP spending (Below 120%) Not-at-risk of impoverishment after OOP spending No OOP spending Catastrophic (>40%) Source: WHO 2015

11 Slovenia 2007 Ireland 2009 Czech 2009 Cyprus 2009 Greece 2008 Latvia 2008 Estonia 2007 Portugal 2005 Lithuania 2008 Zoomed in to see more detail 20% 18% 16% 14% 12% 10% 8% 7.4% 10.0% 10.3% 10.6% 11.5% 6% 4% 2% 0.1% 1.1% 1.2% 2.9% 0% More impoverished by OOP spending Impoverished by OOP spending At-risk of impoverishment after OOP spending (Below 120%) Not-at-risk of impoverishment after OOP spending No OOP spending Catastrophic (>40%) Source: WHO 2015

12 Czech 2009 Estonia 2007 Greece Latvia Lithuania 2008 Portugal Slovenia 2007 What has happened since the crisis? 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% More impoverished by OOP spending Impoverished by OOP spending At-risk of impoverishment after OOP spending (Below 120%) Not-at-risk of impoverishment after OOP spending No OOP spending Catastrophic (>40%) Source: WHO 2015

13 Czech 2009 Estonia 2007 Greece Latvia Lithuania 2008 Portugal Slovenia 2007 Financial protection has deteriorated in many countries since the crisis 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% More impoverished by OOP spending Impoverished by OOP spending At-risk of impoverishment after OOP spending (Below 120%) Not-at-risk of impoverishment after OOP spending No OOP spending Catastrophic (>40%) Source: WHO 2015

14 Catastrophic spending (>40%) Countries with higher out of pocket spending as a share of total expenditure have higher catastrophic expenditure Portugal Greece Latvia Moldova Georgia Estonia Czech Republic Ireland Slovenia Cyprus y = x R² = OOP/THE Source: WHO data

15 Slovenia 2007 Ireland 2009 Czech Republic 2009 Cyprus 2009 Greece 2008 Latvia 2008 Estonia 2007 Portugal 2005 Lithuania % 40% 35% Even in EU countries with low catastrophic spending, the poor are at risk of financial hardship due to OOPs 1 (poorest) (richest) 30% 25% 20% 15% 10% 5% 0% Source: WHO 2015

16 Czech Republic 2009 Estonia 2007 Greece Latvia Lithuania 2005 Portugal Slovenia 2007 The crisis has worsened financial protection for the poor across Europe 35% 1 (poorest) (richest) 30% 25% 20% 15% 10% 5% 0% Source: WHO 2015

17 What are catastrophic spenders purchasing in EU countries? 100% 90% Inpatient 80% 70% 60% Diagnostic tests and other paramedical services Dental 50% 40% Outpatient 30% 20% Other medical products and equipment 10% Drugs 0% Latvia 2013 Estonia Czech Portugal 2010 Greece 2013 Cyprus 2009 Ireland 2009 Slovenia Source: WHO 2015

18 What are the poorest catastrophic spenders (1 st quintile) purchasing? 100% 90% Inpatient 80% 70% Diagnostic tests and other paramedical services 60% Dental 50% 40% Outpatient 30% 20% Other medical products and equipment 10% Drugs 0% Latvia 2013 Portugal 2010 Estonia Czech Greece 2013 Slovenia Ireland 2009 Cyprus 2009 Source: WHO 2015

19 Some preliminary findings Financial protection is a challenge in EU countries and has worsened in many countries since the crisis The poor are the most adversely affected by catastrophic out of pocket spending Much (but not all) catastrophic expenditure is on medicines

20 Thank you!

21 Further information about this project This analysis of financial protection in European health systems is led by the WHO Barcelona Office for Health Systems Strengthening, which is part of the Division of Health Systems and Public Health in the WHO Regional Office for Europe. For more information about the project, please contact:

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