Financial hardship linked to inadequate health coverage policies

WHO/Malin Bring

A new analysis from WHO/Europe, released on Universal Health Coverage (UHC) Day alongside a global UHC monitoring report, compares financial protection in Czechia, Estonia and Latvia. It concludes that households in these broadly similar countries experience markedly different levels of financial hardship when using health services.

According to the report, the incidence of catastrophic and impoverishing out-of-pocket payments – payments that exceed 40% of a household’s capacity to pay for health or push a household into poverty – is very low in Czechia, higher in Estonia and among Europe’s highest in Latvia.

“WHO/Europe’s work on financial protection is a response to a call from Member States for country-level monitoring using methods that are relevant to high- and middle-income countries,” says Tamás Evetovits, Head of the WHO Barcelona Office for Health Systems Strengthening in the Division of Health Systems and Public Health. “We find evidence of financial hardship even in Europe’s developed economies.”

Poorest households and pensioners hurt most by out-of-pocket payments for health

Findings from the report indicate that catastrophic payments for health are heavily concentrated among the poorest households in all 3 countries. Pensioner households are at high risk of facing catastrophic payments in Estonia and Latvia, especially for medicines, but this is not the case in Czechia.

Differences in coverage policies affect financial hardship

“Our analysis suggests that differences in financial hardship can be explained by differences in coverage policy: who, what and how much of the cost of health care is covered by public spending,” notes Sarah Thomson, Senior Health Financing Specialist at WHO/Europe.

“Coverage policy is the main mechanism through which households are exposed to out-of-pocket payments. It also determines how out-of-pocket payments are distributed across income groups,” she explains.

The report finds that copayments (user charges) for outpatient medicines in Estonia and Latvia disproportionately shift the burden of health care costs onto those who can least afford to pay out of pocket: poor people, people with chronic conditions and older people.

Ways of overcoming financial hardship

In Czechia, the design of copayment policy is more robust: people pay a low, fixed copayment for health services and medicines, rather than a percentage of the price; vulnerable people are exempt from copayments; and there is a cap on copayments for everyone, with an even more protective cap for those who are under 18 years of age or 65 years of age and over.

As a result, the number of households in Czechia that face catastrophic out-of-pocket payments is low, outpatient medicines are accessible and pensioners do not experience undue financial hardship.

“Although the populations of most countries in Europe are entitled to publicly financed health services, this is not a guarantee of financial protection,” explains Evetovits. “Policies designed to reduce out-of-pocket payments, particularly for poor people, are vital to making progress towards UHC.”

New evidence can move Europe towards UHC

In the coming months, WHO/Europe will publish a series of individual reports on financial protection in 25 countries. Based on a new method of measuring financial protection, the context-specific analysis in these reports is generating evidence that policy-makers can use to move towards UHC. The goal of UHC – ensuring everyone has access to quality health services without financial hardship – is set out in target 3.8 of the Sustainable Development Goals.

WHO/Europe’s approach to measuring financial protection complements global measures by accounting for differences in households’ capacity to pay for health.

Findings from a regional comparative analysis will be presented at a high-level technical meeting in Tallinn, Estonia in June 2018 – Health Systems for Prosperity and Solidarity: leaving no one behind – hosted by the Government of Estonia to celebrate 10 years of the Tallinn Charter: Health Systems for Health and Wealth.