Out-of-pocket payments by users to health care providers: a very inequitable funding method

Posted on Tuesday, November 20, 2012

OTTAWA, November 20, 2012 — According to the World Health Organization, each year more than 100 million people are plunged into poverty because of catastrophic health care expenses. Accessibility to quality care, the ability of lower income individuals to pay health care costs and the funding of health care systems remain priority issues around the world. Despite encouraging indications in recent years, the economic crisis has significantly decreased the progress made in terms of access to care in a number of countries.

In the article Unexpected impact of changes in out-of-pocket payments for health care on Czech household budgets published in Health Policy, Sanni Yaya, a professor at the University of Ottawa’s Interdisciplinary School of Health Sciences, and his colleague Veronika Krůtilová examine the impact of out-of-pocket payments on the income of households in the Czech Republic. The Czech case is relevant because that country recently introduced a system based on the principle of “user fees” to help fund health care.

In examining the burden of private health care expenses, the authors determined the impact of these catastrophic expenses, that is, whether the financial participation of households was too high in relation to their income. It should be noted that such expenses can occur in any country, regardless of its stage of development and despite the existence of mechanisms for sharing the financial risks associated with illness.

The study’s findings show that the introduction of user fees increased the financial burden on households from 2.15% of their total income in 2007 to 2.63% in 2008 and to 2.55% in 2009. However, unlike the situation in a number of member countries of the Organisation for Economic Co-operation and Development, it appears that Czech households generally pay for a relatively low portion of health care costs in proportion to their incomes. That being said, the study found that it is women, seniors and retired persons who are being hit the hardest by out-of-pocket payments. They are the ones spending significant amounts on the purchase of prescription medications.

According to Professor Yaya, the user-pay principle is not a cure-all. “For 30 years, the variety, availability and purchase of pharmaceutical products has been growing at a meteoric pace with the result that prescription drugs represent one of the largest components of modern health care. They are also one of the most costly methods of care.”

The findings of this study are relevant for Canada. Although health care costs in Canada have decreased for the third straight year, these costs continue to climb for households. “Knowing that many Canadians do not have the funds to fill their prescriptions and that drug insurance is a luxury not everyone can afford, it is imperative for governments to show creativity in order to protect citizens from financial disaster and impoverishment as a result of accessing care and using health services,” stated Mr. Yaya.

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