[EQ] Equity in Health Care Financing: The Case of Malaysia

Equity in Health Care Financing: The Case of Malaysia

 

Chai Ping Yu¹, David K Whynes², Tracey H Sach³

¹ Health Economics Research Group, Brunel University, Uxbridge, United Kingdom.

² School of Economics, University of Nottingham, United Kingdom.

³ School of Chemical Sciences and Pharmacy, and Health Economics Group, University of East Anglia, Norwich, United Kingdom.

International Journal for Equity in Health June 2008, 7:15 doi:10.1186/1475-9276-7-15

 

Available online PDF [49p.] at: http://www.equityhealthj.com/content/pdf/1475-9276-7-15.pdf

 

Background: Equitable financing is a key objective of health care systems. Its importance is evidenced in policy documents, policy statements, the work of health economists and policy analysts. The conventional categorisations of finance sources for health care are taxation, social health insurance, private health insurance and out-of-pocket payments. There are nonetheless increasing variations in the finance sources used to fund health care. An understanding of the equity implications would help policy makers in achieving equitable financing.

 

Objective: The primary purpose of this paper was to comprehensively assess the equity of health care financing in Malaysia, which represents a new country context for the quantitative techniques used. The paper evaluated each of the five financing sources (direct taxes, indirect taxes, contributions to Employee Provident Fund and Social Security Organization, private insurance and out-of-pocket payments) independently, and subsequently by combined the financing sources to evaluate the whole financing system.

Methods: Cross-sectional analyses were performed on the Household Expenditure Survey Malaysia 1998/99, using Stata statistical software package. In order to assess inequality, progressivity of each finance sources and the whole financing system was measured by Kakwani’s progressivity index.

 

Results: Results showed that Malaysia’s predominantly tax-financed system was slightly progressive with a Kakwani’s progressivity index of 0.186. The net progressive effect was produced by four progressive finance sources (in the decreasing order of direct taxes, private insurance premiums, out-of-pocket payments, contributions to EPF and SOCSO) and a regressive finance source (indirect taxes).

 

Conclusions: Malaysia’s two tier health system, of a heavily subsidised public sector and a user charged private sector, has produced a progressive health financing system. The case of Malaysia exemplifies that policy makers can gain an in depth understanding of the equity impact, in order to help shape health financing strategies for the nation.

 

       *      *      *     *  
         This message from the Pan American Health Organization, PAHO/WHO, is part of an effort to disseminate 
         information Related to: Equity; Health inequality; Socioeconomic inequality in health; Socioeconomic 
         health differentials; Gender; Violence; Poverty; Health Economics; Health Legislation; Ethnicity; Ethics; 
         Information Technology - Virtual libraries; Research & Science issues.  [DD/ KMS Area] 

         “Materials provided in this electronic list are provided "as is". Unless expressly stated otherwise, the findings
         and interpretations included in the Materials are those of the authors and not necessarily of The Pan American
         Health Organization PAHO/WHO or its country members”.
         ---------------------------------------------------------------------------------------------------
         PAHO/WHO Website: http://www.paho.org/ 
         EQUITY List - Archives - Join/remove: http://listserv.paho.org/Archives/equidad.html

 

 

    IMPORTANT: This transmission is for use by the intended recipient and it may contain privileged, proprietary or confidential information. If you are not the intended recipient or a person responsible for delivering this transmission to the intended recipient, you may not disclose, copy or distribute this transmission or take any action in reliance on it. If you received this transmission in error, please notify us immediately by email to infosec@paho.org, and please dispose of and delete this transmission. Thank you.