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Catastrophe and impoverishment in paying for health care: with applications to Vietnam 1993-1998

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  • Adam Wagstaff
  • Eddy van Doorslaer

    (Department of Health Policy & Management, Erasmus University, Rotterdam, The Netherlands)

Abstract

This paper presents and compares two threshold approaches to measuring the fairness of health care payments, one requiring that payments do not exceed a pre-specified proportion of pre-payment income, the other that they do not drive households into poverty. We develop indices for 'catastrophe' that capture the intensity of catastrophe as well as its incidence and also allow the analyst to capture the degree to which catastrophic payments occur disproportionately among poor households. Measures of poverty impact capturing both intensity and incidence are also developed. The arguments and methods are empirically illustrated with data on out-of-pocket payments from Vietnam in 1993 and 1998. This is not an uninteresting application given that 80% of health spending in that country was paid out-of-pocket in 1998. We find that the incidence and intensity of 'catastrophic' payments - both in terms of pre-payment income as well as ability to pay - were reduced between 1993 and 1998, and that both incidence and intensity of 'catastrophe' became less concentrated among the poor. We also find that the incidence and intensity of the poverty impact of out-of-pocket payments diminished over the period in question. Finally, we find that the poverty impact of out-of-pocket payments is primarily due to poor people becoming even poorer rather than the non-poor being made poor, and that it was not expenses associated with inpatient care that increased poverty but rather non-hospital expenditures. Copyright © 2003 John Wiley & Sons, Ltd.

Suggested Citation

  • Adam Wagstaff & Eddy van Doorslaer, 2003. "Catastrophe and impoverishment in paying for health care: with applications to Vietnam 1993-1998," Health Economics, John Wiley & Sons, Ltd., vol. 12(11), pages 921-933.
  • Handle: RePEc:wly:hlthec:v:12:y:2003:i:11:p:921-933
    DOI: 10.1002/hec.776
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    References listed on IDEAS

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    1. Angus Deaton & Salman Zaidi, 2002. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," World Bank Publications, The World Bank, number 14101.
    2. World Bank, 2001. "Growing Healthy : A Review of Vietnam's Health Sector," World Bank Other Operational Studies 15512, The World Bank.
    3. van Doorslaer, Eddy & Wagstaff, Adam & van der Burg, Hattem & Christiansen, Terkel & De Graeve, Diana & Duchesne, Inge & Gerdtham, Ulf-G & Gerfin, Michael & Geurts, Jose & Gross, Lorna, 2000. "Equity in the delivery of health care in Europe and the US," Journal of Health Economics, Elsevier, vol. 19(5), pages 553-583, September.
    4. Adam Wagstaff & Eddy van Doorslaer, 2000. "Measuring and Testing for Inequity in the Delivery of Health Care," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 716-733.
    5. Wagstaff, Adam & van Doorslaer, Eddy & van der Burg, Hattem & Calonge, Samuel & Christiansen, Terkel & Citoni, Guido & Gerdtham, Ulf-G & Gerfin, Mike & Gross, Lorna & Hakinnen, Unto, 1999. "Equity in the finance of health care: some further international comparisons1," Journal of Health Economics, Elsevier, vol. 18(3), pages 263-290, June.
    6. van Doorslaer, Eddy & Wagstaff, Adam, 1992. "Equity in the delivery of health care: some international comparisons," Journal of Health Economics, Elsevier, vol. 11(4), pages 389-411, December.
    7. Wagstaff, Adam & van Doorslaer, Eddy, 1992. "Equity in the finance of health care: Some international comparisons," Journal of Health Economics, Elsevier, vol. 11(4), pages 361-387, December.
    8. Bloom, Gerald, 1998. "Primary health care meets the market in China and Vietnam," Health Policy, Elsevier, vol. 44(3), pages 233-252, June.
    9. Wagstaff, Adam & van Doorslaer, Eddy & Paci, Pierella, 1991. "On the measurement of horizontal inequity in the delivery of health care," Journal of Health Economics, Elsevier, vol. 10(2), pages 169-205, July.
    10. Kakwani, Nanak & Wagstaff, Adam & van Doorslaer, Eddy, 1997. "Socioeconomic inequalities in health: Measurement, computation, and statistical inference," Journal of Econometrics, Elsevier, vol. 77(1), pages 87-103, March.
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