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Beyond Universal Coverage Part I

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Health sector inequalities and financial protection – is UC enough?

Since the publication of the 2010 World Health Report “Health Systems Financing: The Path to Universal Coverage”, the “universal coverage” (UC) agenda has accelerated worldwide.

In this post, I ask how far UC is likely to narrow health sector inequalities and improve financial protection. In the next two I pick up a couple of other themes: the need to look beyond the quantity of care to the quality of care; and how far we should try to incorporate the cost of forgone care into a measure of financial protection.

UC’s ultimate goal – less inequality, more financial protection

In a post on this blog the week before the WHO report’s launch, I asked: “What’s the “universal health coverage” push really about?”. I argued:

The problem with … much if not most of the debate on universal coverage … is that it portrays the universal health coverage challenge as an either-or problem. People either have coverage or they don’t. In actual fact, everyone everywhere has some coverage. The stark reality, though, is that in many – if not most – countries there are large inequalities in coverage, typically mirroring pretty closely the income distribution. The challenge, it seems to me, is not to cover everyone (already achieved). Or even to give everyone the same cover (desirable but equality of effective coverage is best seen as a long-term goal). Rather, the … challenge … is really about narrowing inequalities in coverage.”

If I’m right, we should be asking whether – in practice – introducing UC actually narrows health sector inequalities. Does UC lead to a narrowing of inequalities in utilization? Does it help reduce the often pro-rich bias in government health spending? Does it help reduce the incidence of catastrophic and/or impoverishing health expenses, especially among the poor and near-poor?

My preliminary answer to these questions is that at best UC may help, but even when it does, it can leave large inequalities in the health sector. In fact, it’s not even clear that a formal UC policy is even necessary to narrow health sector inequalities.

Do UC countries do better?
A study by Eddy van Doorslaer and Cristina Masseria – commissioned by the OECD – shows the large differences across OECD countries in the degree of inequality in utilization of physician and hospital care. The interesting thing is that the degree of inequality doesn’t seem to have much to do with whether the country has a UC policy in place or not. In Switzerland and the US (non-UC countries), inpatient care utilization was found to be higher among the poor after adjusting for need differences across income groups, while in Ireland and Portugal (UC countries) hospital care utilization was higher among the better off. Use patterns of physician care look different (e.g. in the US rates are higher among the better off), but pro-rich inequalities are evident in several UC countries, including Finland, Portugal and Sweden, while non-UC countries like Switzerland have small poor-nonpoor gaps in physician care utilization.

What about the link between UC and financial protection? A study by Ke Xu and other WHO staff reported rates of catastrophic out-of-pocket spending across 59 countries. The countries with the first and second highest rates were Vietnam (non-UC) and Brazil (UC). Indonesia (non-UC) and Sri Lanka (UC) tied for 26th position.

Do UC reforms help?
Several countries have implemented UC reforms, and we are beginning to get evidence on the impacts of these reforms.

Vietnam’s “health care for the poor” program brought large numbers of poor and other vulnerable households into the country’s social health insurance program, starting around 2003. Yet according to my own research the scheme doesn’t appear to have had much impact on utilization; unsurprisingly inequalities in ambulatory care and inpatient care don’t appear to have narrowed. The scheme does seem to have reduced out-of-pocket spending, but despite this the incidence of catastrophic spending – even among the poor – appears to have risen during the 2000’s.

Indonesia also took a big push toward UC around the same time, introducing its Askeskin scheme in 2004 targeting 36m poor people, and then launching its Jamkesmas scheme in 2008, targeting a further 76m people. Preliminary evidence by my colleague John Giles suggests that Askeskin increased outpatient and inpatient care use among the poor but only among women. Moreover, large pro-rich inequalities in utilization were evident even after the scheme’s introduction.

Thailand introduced UC in 2002, taking coverage from around 70 percent to almost 95 percent. Pre- and post-UC comparisons show that the incidence of catastrophic spending has fallen since the introduction of UC, and the degree of pro-rich inequality in outpatient and inpatient utilization – as well as government health spending – has fallen. However, it is not clear how far these changes can be attributed to UC – these are just pre- and post-UC comparisons. Moreover, inequalities in the Thai health sector were already pro-poor before UC – they simply became even more pro-poor afterwards.

China took a major step toward UC in the early 2000’s with the launch of the new rural cooperative medical scheme. Research that I did with others – covering the start of the 5-year rollout period – suggests that the scheme provided insurance coverage to a large fraction of the rural population, and had positive impacts on utilization. However, we found no significant impacts on out-of-pocket spending, and my sense is that – despite the scheme – inequalities in utilization still persist in rural China.

Not a comprehensive assessment – but worrying nonetheless
There are, of course, other studies of the impacts of UC-type schemes, with variations in the degree of analytic rigor. And cross-country comparisons are fraught with problems too. Nonetheless, my guess is that as the evidence base expands, we will end up with a rather sobering conclusion: while UC may help nudge us toward reduced inequality and improved financial protection in health, it will never be enough to get us where we want to be. Sometimes, in fact, it might not even be the most effective instrument. 

For part II of this post, visit this blog next week.



Adam Wagstaff

Research Manager, Development Research Group, World Bank

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