Who pays if you’re sick?

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Emerging economies have made good progress on health coverage recently, but the share of out-of-pocket payments in total health expenditure remains significantly higher than in most advanced countries.

Direct payments by people receiving healthcare can represent quite a blow to the living standards of households. This is especially the case for poor households, though can also be true for relatively better-off households when the costs of hospitalisation, medicines, or even forgone income are high.

Out-of-pocket payments are particularly important in India and Mexico, but also in China, where they covered more than 40% of total health expenditure in 2008. They covered almost one third of total health expenditure in Indonesia, Brazil and Russia.

Not surprisingly, studies have found that countries where out-of-pocket payments are higher tend to be those where the share of households incurring catastrophic, and therefore impoverishing, health expenditures are also elevated. To make matters worse, households faced with high out-of-pocket expenses for healthcare often postpone health checks and forgo care altogether when they fall sick. This is especially true for the poorest, who often need healthcare most. To be sure, the better-off receive more healthcare than the poor in those Asian countries relying most heavily on direct payments, such as India and Indonesia.

©OECD Observer No 287 Q4 2011




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