ASSESING PROGRESSIVITY OF OUT-OF-POCKET EXPENDITURES FOR HEALTH CARE: EVIDENCE FROM HOUSEHOLDS IN MALAYSIA

Abstract

Background: Out-of-pocket (OOP) payments is a principal means of financing health care throughout both developed and developing countries. Over-reliance on OOP payments may pose an undesirable effect from an equity perspective, where equity in financing is an important policy objective of the health care system.

Objectives: To assess the progressivity of OOP payments for health care among Malaysian households.

Methods: This paper used cross-sectional nationally representative data derived from the Malaysian Household Expenditure Survey (HES) 2014/15, which comprised of 14,473 households. Progressivity measures deviation from proportionality in the relation between OOP payments and ability to pay (ATP). This paper combined evidence from proportion approach, graphical measures (concentration curve) and summary indices (Gini coefficient, concentration index and Kakwani index) to demonstrate the progressivity of OOP health payments among Malaysian households.

Result: More than two-third (77%) of Malaysian households surveyed reported to have made OOP health payments. The average shares of OOP payments from household consumption was 1.65% and was increasing across the household consumption quintiles. The OOP payments distribution was progressive demonstrated by all three approaches. The household consumption and burden of OOP payments was concentrated among the richer populations, with positive Gini coefficient and concentration index. The Kakwani index of OOP payments was 0.0910, indicates mildly progressive OOP payments in Malaysia.

Conclusion: The OOP health payments in Malaysia has a progressive distribution. However, reducing progressivity trend should be monitored by the policymakers, and to decide further strategies on policy improvements pertaining to the country’s health financing.

Keywords:   Progressivity, Out-of-Pocket Expenditures, Health Care, Malaysia