Measuring the Distribution of Health Payments and Catastrophic Effects of Health Spending in Zambia: An Analysis of Household-Level Survey Data

Presenter: Chitalu Chama

Abstract

In Zambia, the main avenue for delivering preventive and curative health care services to the majority of the population is the public health system. One of the challenges facing the health system relates to the health financing mechanism: Zambian households are among the main contributors to health expenditure, mainly through their out of pocket payments ( National Health Accounts, 2006). Evidence suggests that out of payments are the least progressive forms of health financing and that heavy reliance on them as a mode of health care financing without any financial risk protection measures potentially results in catastrophic health payments (McIntyre, 2006, Xu, et al., 2003).

This study seeks to show that households experiencing ill health further face health expenditures that expose them to the possibility of catastrophic expenditures and subsequent impoverishment. Specifically, it: establishes the structure of out of pocket payments; estimates catastrophic expenditures and impoverishment in Zambia; assesses the distribution of catastrophic health expenditure and impoverishment; and establishes the determinants of catastrophic health payments. The study employs the World Health Organisation methodology, which uses descriptive statistics and logistic regression analysis. The household is the basic unit of analysis. The data are from the 1991 and 1993 Priority Surveys, and the 1996, 1998, 2004 and 2006 LCMSs. An interrupted time-series comparison of the results obtained for each of the survey years is undertaken.

Preliminarily, the study finds a wide range of factors associated with catastrophic health expenditure: households with children under five (as would be expected given a clear user fee exemption policy for this age group) and those with higher educated household-heads are less likely to face catastrophic payments; households with working household-heads and those with some kind of health insurance or pre-payments scheme face lesser risk of catastrophic payments; households in urban areas are at a higher risk of facing catastrophic payments, which potentially lead to impoverishment. These results are consistent with the findings of Flessa(2006) and Xu et al (2006). The evidence will enable policy makers to know which households are at greater risk of facing catastrophic health payments and which household characteristics may lead them to impoverishment. The findings are of great policy relevance to policy makers in Zambian and in the sub-Saharan Afrcian region.