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Catastrophic Expenditure under "Free Care" Policy in Low-Income Country: A Case Study from Liberia

This case study examines the impact of the "free care" policy on catastrophic expenditure in Liberia, analyzing its existence, who bears the burden, and its impact on daily living. Policy implications for universal coverage and reducing inequity in health financing are discussed.

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Catastrophic Expenditure under "Free Care" Policy in Low-Income Country: A Case Study from Liberia

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  1. Catastrophic expenditure under “free care” policy in low-income country: A case study from Liberia Hong Wang, MD; PhD Abt Associates Inc. 1st Global Symposium on Health Systems Research November 18, 2010

  2. Background • Many low-income countries adopted “free care” policy, in order to achieve MDG goals, as well as universal coverage. • A defined basic package of healthcare services, or selected priority services are provided free of charge at the point of services. • This policy may reduce financial barrier of utilizing defined services. However, little is known about its impact on prevention of catastrophic expenditure, which is another goal (concept of fairness) of health financing policy (WHO, 2000).

  3. Objectives • Analyzing catastrophic expenditure status under “free care” policy in Liberia. • Specifically, following three issues will be examined • Does catastrophic expenditure still exist? • Who bears catastrophic expenditure? • What are the impacts on people’s daily living?

  4. Liberia “free care” policy • National Health Plan (2006): Remove user fees for all Basic Package of Health Services (BPHS) in public facilities” • BPHS includes range of services in the following priority areas • Maternal and Newborn health • Child Health • Adolescent, Sexual and Reproductive Health • Disease prevention, control and management • Mental Health • Essential Emergency Treatment • Targets all population • Government and Donors are main funding sources for free care

  5. Methods • Data source: A household survey in 2008, N=2528 • Source: Health Financing Studies (HFS), conducted by Liberia Institute for Statistics and Geo-information service (LISGIS) • Definition of catastrophic expenditure • Spending over 10%-20% household expenditure on healthcare (WB) • Analysis • Incidence and intensity analysis: Does catastrophic expenditure exist? • Headcount and mean positive overshot (MPO) • Determinant analysis: Who bear the catastrophic expenditure? • Logistic regression analysis (Catastrophic=1) • Household consumption analysis: What are the impacts? • Fractional logit model (% of expenditure)

  6. Figure 1. Incidence and intensity of catastrophic expenditure Total catastrophic overshoot: Healthcare expenditure shares exceeding threshold. Mean positive overshoot (MPO)= O / No. of HHs exceeding threshold. MPO=8.6% 50% % of Healthcare expenditure in total expenditure Headcount: Proportion HHs exceeding threshold Headcount=12% Catastrophic threshold Z=10% 0 20% % of household, ranked by decreasing the share of healthcare expenditure in total expenditure

  7. Discussion • Though “free care” policy may serve certain specific health and political purposes, its function on financial risk protection is limited • Catastrophic expenditure of healthcare is still an unsolved social problem, which affects daily living significantly • Without appropriate target strategy, catastrophic expenditure will proportionally affect more to the poor than to the rich • Financing is only one of HSS efforts. Service availability also played a critical role in financial risk protection.

  8. Policy implications • What is role of “free care” policy in universal coverage? • How to reduce catastrophic expenditure, in addition to “free care” policy? • How to target to the poor to reduce inequity in health financing? • How to reduce catastrophic expenditure, in addition to health financing strategy?

  9. Thank you Contact information: Hong Wang, MD, PhD hong_wang@abtassoc.com

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