The Catastrophic Expenditure and the Financial Protection in Health: The Case of Costa Rica
Year: 2007
Type: preprint
Study design: Observational Study
Abstract: Rationale: In a public financed health system it is expected that the private financing represents a small part of the expenditures devoted to health. When the amount of expenditures devoted to health surpasses a pre-established threshold of 30 percent of the total income, households (HH) have a catastrophic expenditure, since the health demand implies a financial catastrophe for the families. Costa Rica is a country characterized by a growing private expenditure in health, but no estimations have been made about the amount and percentage of households that are facing a catastrophic expenditure. With publication of the income and expense survey results for 2004, the Sanigest consultants were capable of providing the first estimation of the catastrophic expenditure in health. Objectives: The objective of the investigation is to calculate the percentage and amount of HH that confronted a catastrophic expenditure during the time the survey was conducted and also to provide a quantification of the Financial Fairness Indicator (FFI) for the health system of Costa Rica. Methodology: Two different indicators were used for estimating the catastrophic expenditures: (i) Health expenditure reported by the HH: out of pocket (OOP) expenditure derived from the variable monthly health expenditure, and (ii) total health expenditure (THE), calculated as the sum of OOP and the amount of social security contributions to health reported by the HH (5.5 percent of the salary for the financing of the Seguro de Enfermedad y Maternidad). All the variables were relative to the size of the HH. For estimating the catastrophic expenditures, three different thresholds were used: 20, 30 (recommended by the WHO), and 40 percent of the total income of the HH. For estimating the incomes of the HH, three different sources were used: total income reported, total expenditure reported, and total discretionary expenditures (recommended by the WHO). Results: Between 1 and 4 percent of the Costa Rican HH confront some form of catastrophic expenditures, and the situation is critical for the income quintiles 2 and 3. In HH confronting catastrophic expenditures, health services attention and hospital services represents the most important category of expenditure. The calculation of the FFI presented a value of 0.95. Conclusions: The authorities of the Social Security Institute in Costa Rica need to focus their attention on the vulnerable groups that are confronting catastrophic expenditures, to keep in line with the poverty reduction politics of the Government. As the first estimation of HH catastrophic expenditures in Costa Rica, these figures need to be analyzed further to determine what possibly triggered this to occur: lower level of attention given to solving health problems in the public health system?, private doctors using public facilities for reducing waiting times?, etc.
Source: SSRN Electronic Journal
Authors: James Cercone, Rodrigo Briceno
Language: English
Field: Medicine
Domain: Health Sciences
Open Access status: green
OpenAlex ID: W2289053606