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The Distributional Impact of Healthcare Financing in Nigeria: A Case Study of Enugu State

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  • Hyacinth Ementa Ichoku
  • William Munpuibeyi Fonta

Abstract

The deregulation of healthcare financing and supply in Nigeria has shifted the healthcare system towards competitive market ideals. Households' decision to utilize healthcare is identical with healthcare financing. This financing arrangement has potentials for income redistribution in a society with already high levels of inequality in resource redistribution. This study attempts to examine the extent to which this system of healthcare financing leads to catastrophic expenditures, defined as a threshold percentage of a household's income, and the extend of impoverishment arising from healthcare spending. It also uses the Aronson, Johnson, and Lambert (1994) decomposition framework to analyze redistributive effects in terms of vertical and horizontal inequities, as well as re-ranking effect. The study finds that healthcare spending engenders high incidence of catastrophic spending and impoverishment in the population. It also finds that healthcare spending is pro-rich in its redistributive effect, with significant vertical and horizontal inequities as well as reranking inherent in the system. The paper suggests policy reforms that separate healthcare utilization from healthcare financing if the poor are to have access to healthcare services.

Suggested Citation

  • Hyacinth Ementa Ichoku & William Munpuibeyi Fonta, 2006. "The Distributional Impact of Healthcare Financing in Nigeria: A Case Study of Enugu State," Working Papers PMMA 2006-17, PEP-PMMA.
    • Handle: RePEc:lvl:pmmacr:2006-17
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    References listed on IDEAS

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    9. Gerdtham, Ulf-G. & Sundberg, Gun, 1996. "Redistributive Effects of the Swedish Health Care Financing System," SSE/EFI Working Paper Series in Economics and Finance 115, Stockholm School of Economics.
    10. Peter Lambert, & Xavier Ramos, 1995. "Vertical redistribution and horizontal inequity," IFS Working Papers W95/01, Institute for Fiscal Studies.
    11. Wagstaff, Adam*Doorslaer, Eddy van, 2001. "Paying for health care : quantifying fairness, catastrophe, and impoverishment, with applications to Vietnam, 1993-98," Policy Research Working Paper Series 2715, The World Bank.
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    Cited by:

    1. Oruonye, E. D & Abubakar, H & Ahmed, M.Y & Yakubu Dan, 2017. "HIV/AIDS Interventions in Gombe State Nigeria; Challenges of Sustaining the Gains," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 7(6), pages 448-457, June.
    2. H. Eme Ichoku & William Fonta & Michael Thiede, 2011. "Socioeconomic gradients in self-rated health: a developing country case study of Enugu State, Nigeria," Economic Change and Restructuring, Springer, vol. 44(3), pages 179-202, August.
    3. Oserei, Kingsley & Uddin, Godwin, 2019. "The myth and reality of government expenditure on primary health care in Nigeria: Way forward to inclusive growth," MPRA Paper 99094, University Library of Munich, Germany.
    4. Riman, Hodo B. & Akpan, Emmanuel S., 2012. "Healthcare Financing and Health outcomes in Nigeria: A State Level Study using Multivariate Analysis," MPRA Paper 55215, University Library of Munich, Germany.
    5. Emmanuel O. Nwosu & Anthony Orji, 2018. "A Comparative Analysis of Socioeconomic Indicators and Child Nutritional Status in Nigeria’s Geopolitical Zones," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 11(5), pages 1677-1698, October.

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    More about this item

    Keywords

    Redistributive effects; Healthcare financing; Catastrophic financing; Impoverishing effects; Equity; Nigeria;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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