Publication: CATA Meets IMPOV : A Unified Approach to Measuring Financial Protection in Health
Eozenou, Patrick Hoang-Vu
Up to now catastrophic and impoverishing payments have been seen as two alternative approaches to measuring financial protection in health. Building on the previous literature, the authors propose a unified methodology in which impoverishing and catastrophic payments are mutually exclusive outcomes. They achieve this by expressing out-of-pocket payments as a ratio of 'discretionary' consumption, defined as the amount by which total consumption (gross of out-of-pocket payments) exceeds the poverty line. This allows the authors to identify both households who are impoverished by out-of-pocket payments (their ratio exceeds one) and households who are pushed even further into poverty by out-of-pocket payments (their ratio is negative); the authors call such payments 'immiserizing'. Households experiencing 'catastrophic' payments are a subset of those who incur out-of-pocket payments but who are neither impoverished nor immiserized by them. Two alternative definitions of catastrophic payments are offered: those that absorb more than a pre-specified fraction of discretionary consumption; and those that leave a household's nonmedical consumption (total consumption net of out-of-pocket spending) below a pre-specified multiple of the poverty line. The authors also offer a simple financial protection index that reflects the percentages of households incurring immiserizing, impoverishing, catastrophic, non-catastrophic, and zero out-of-pocket payments. They illustrate their unified approach with data from the World Health Survey, using international poverty lines and a catastrophic payment threshold of 40 percent.
“Wagstaff, Adam; Eozenou, Patrick Hoang-Vu. 2014. CATA Meets IMPOV : A Unified Approach to Measuring Financial Protection in Health. Policy Research Working Paper;No. 6861. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/18353 License: CC BY 3.0 IGO.”
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