[EQ] An Alternative Framework for Analyzing Financial Protection in Health

An Alternative Framework for Analyzing Financial Protection in Health

Jennifer Prah Ruger argues for a more multidemensional assessment of financial protection in health,
which can better capture health expenditures and the full burden of health cost burdens

Yale Schools of Medicine and Public Health, New Haven, Connecticut, United States of America

PLoS Med 9(8): e1001294. doi:10.1371/journal.pmed.1001294

Published: August 21, 2012 at: http://bit.ly/NkzdFC

Summary Points

Inadequate financial protection in health increases people's vulnerability and diminishes well-being, exacerbating inequities and raising moral concerns.

Conventional indicators of financial protection such as catastrophic spending and impoverishing spending are too narrowly conceived and likely to underestimate the adverse effects of insufficient financial protection.

Limitations of conventional indicators include failure to capture cost barriers to access, differences in health care utilization by ability to pay, different degrees of financial protection and coverage, “informal” treatment payments, debt financing of health spending, reduced consumption of other household necessities, as well as indirect costs of illness and coping strategies.

A multidimensional financial protection profile can capture interrelated aspects of health expenditure, such as direct and indirect costs of illness, coping strategies used to meet costs, insurance status and utilization, household consumption patterns, and how health costs affect them.

With the data the profile yields, researchers can further study health costs' effects by poverty or income level and type of health treatment for a fuller, more comprehensive view of health cost burdens and their distribution. …”

 

“…….Consensus had developed among academic and policy analysts on two primary metrics, catastrophic and impoverishing spending, for financial protection. Both methods use as a measure the percentage of out-of-pocket health spending in households' overall spending. They differ in the way medical spending is deemed problematic: catastrophic spending is above a threshold percentage, while impoverishing spending pushes a household below the poverty line. Both metrics are helpful indicators of the absolute and relative level of household out-of-pocket health care spending and have been employed in multiple studies worldwide.
Our research group conducted a study focusing on a modification of these metrics—the out-of-pocket spending burden ratio using household equivalent income derived from the Organisation for Economic Co-operation and Development (OECD) Equivalence Scale [11].

 

But the consensus has given way, and critiques of the conventional approach now run wide and deep. Critics include those who are most invested and who have employed these methodologies,and those who argue that estimates of household health expenditures themselves are subject to considerable variability depending on survey design.

 

This article proposes a multidimensional financial protection profile that offers a more holistic view of health spending, one that goes beyond the level of spending to cover aspects directly related to health care, such as health care access and insurance utilization, and examines broader impacts on current and longer-term household consumption. This multidimensional approach aims to help policy makers understand the larger context of household health spending and make health and social policy adjustments to mitigate damaging effects…..”

 

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