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    Who pays for health care in Asia?

    Equitap Working Paper Number 1

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    Owen O'Donnell, Eddy van Doorslaer, Ravi P. Rannan-Eliya, Aparnaa Somanathan, Shiva Raj Adhikari, Baktygul Akkazieva, Deni Harbianto, Shamsia Ibragimova, Charu C. Garg, Piya Hanvoravongchai, Alejandro N. Herrin, Mohammed N. Huq, Anup Karan, Soon-man Kwon, Gabriel M. Leung, Jui-fen Rachel Lu, Yasushi Ohkusa, Badri Pande, Rachel Racelis, Keith Tin, Laksono Trisnantoro, Chitpranee Vasavid, Quan Wan, Bong-Min Yang, and Yuxin Zhao.
    1 Apr 2005

    Abstract: We describe the structure and the distribution of health care financing in 13 territories that account for 55% of the Asian population. Survey data on household payments are combined with Health Accounts data on aggregate expenditures by source to estimate distributions of total health financing. In all territories, high-income households contribute more than low-income households to the financing of health care. In general, the better off contribute more as a proportion of ability to pay in low and lower-middle income territories. The disproportionality is in the opposite direction in three high/middle income territories operating universal social insurance. Direct taxation is the most progressive source of finance and is most progressive in poorer economies with a narrow tax base. The distribution of out-of-pocket (OOP) payments also depends on the level of development. In high-income economies with widespread insurance coverage, OOP payments absorb a larger fraction of the resources of low-income households. In poor economies, it is the better off that spend relatively more OOP. This contradicts much of the literature and suggests the poor simply cannot afford to pay for health care in low-income economies. Among the high-income territories, Hong Kong is the one example of progressive financing arising from reliance on taxation, as opposed to social insurance, and an ability to shield those on low-incomes from OOP payments. Thailand has a similar financing structure and achieves a similar distributional outcome. The equity implications of a given distribution of financing depend on the extent to which the financing structure ties health care use to payments.




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