Equitable financing, out-of-pocket payments and the role of health care reform in Colombia

Abstract

For a health care system to be considered equitable in its financing, the financial burden of contributions has to be progressive or at least proportional. Out-of-pocket financing takes a larger proportion of poor than of non-poor households' income. To remedy this regressive burden, among other goals, Colombia launched a health care reform based on social insurance as a means to reduce health care financing through out-of-pocket payments, and to reduce financial barriers to access. This paper analyzes the evolution of regressivity in out-of-pocket financing from 1984 to 1997, in order to detect if the 1993 health care reform had an impact on such regressivity. The Kakwani index of progressivity was estimated using three national household surveys. Kakwani indices showed a constant trend towards more regressivity (-0.126 in 1984, to -0.3498 in 1997) when using income to build the index, but a trend towards progressivity (-0.0092 in 1984, to 0.0026 in 1997) when using expenses. Our findings suggest that there was a progressive impact of the reform on out-of-pocket financing when household expenses are used to build the Kakwani index; however, due to issues of comparability between surveys, the findings are not conclusive.