Budget Shares of Out-Of-Pocket Medical Expenditure

OOP payment for healthcare is defined as expenditure for drugs and medicine, medical and dental care, hospital room charges, and contraceptives. In Thailand, since universal coverage reform in 2001, there has been a flat charge of 30 baht per visit for most medical services, and no charge for vaccinations, immunizations, and family planning. Under this health program, the medical expenditure reported in the survey is based on number of visits and may underestimate the actual expenditures associated with severity of illness.

Table 5 [ PDF 14.7KB | 1 page ] presents the average household medical expenditure. Although survey data on medical expenditure is potentially subject to bias due to the infrequency in which many healthcare payments are made, the one year recall period of this survey should reduce such bias. It appears from Table 5 that OOP medical expenditure is significantly higher for conventional farmers than for organic farmers. On average, conventional households spent 1,277 baht on healthcare payments, compared with 712 baht spent by organic households. Except the second richest quintile, all conventional agriculture households had significantly higher OOP medical expenditure, although the difference is statistically significant only in the richest quintile, in which conventional agriculture households spent 3,892 baht/year compared to 1,245 baht/year for organic agriculture households.

The budget shares of OOP payments are shown in Table 6 [ PDF 14.7KB | 1 page ]. For all households, OOP payments accounted for 1.62% of total household expenditure and 2.31% of discretionary expenditure. The mean budget share of OOP payments was higher for conventional households than for organic households, both as a share of total household expenditure and as a share of discretionary expenditure. For all quintiles except the second richest, organic households spent a smaller proportion of their household budget on healthcare than their conventional counterparts.

The burden of OOP payments is also disproportionately borne by the poor, as the poorest households spent a larger fraction of their resources on healthcare than the richest. The gradient is steepest as a proportion of discretionary spending, as the two poorest quintiles spent approximately 3% of discretionary expenditure on healthcare, compared with only 1.85% for the two richest quintiles. In addition to the quintile means of budget share, the negative concentration indices confirm that the poor are spending more on healthcare than the rich, especially in relation to discretionary expenditure.

These results are consistent with the findings of Whitehead, Dahgren, and Evans (2001) that poor households in low-income countries spend more on OOP payments than the rich. Yet they are inconsistent with the findings of Van Doorslaer et al. (2007) that the rich spend more on healthcare in most countries in Southeast Asia. A possible explanation offered by Van Doorslaer et al. for the disparate results is that findings that poor households spend more on healthcare are typically based on small samples in rural areas. However, when national datasets are used, the results reflect the health expenditure of the whole country, including OOP payments by the wealthier urban population.

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1. Gabby
   (posted 21 January 2009 / 04:39:21 PM)
   
   this is a good contributon to understand the link between health outcomes and occupations...