Defining and Measuring Fairness in Financial Contribution to the Health System

Abstract:     
One of the challenges common to all social systems is to achieve fairness in the distribution of the financing burden, and protection from the risk of financial loss. For health systems, this goal is of particular importance and especially difficult to achieve due to the catastrophic and unpredictable nature of some expenditures. Societies have long demonstrated a special concern about how health systems are financed.(Behrman 1995;Londoño & Frenk 1997;World Health Organization 2000) Much of the public discourse in countries undertaking health sector reform is focused on the design of health system financing and its fairness. (Londoño & Frenk 1997; Wagstaff A & Van Doorslaer E 1998)

The purpose of this paper is to present a definition, a measure and an index of fairness in financial contribution to the health system. Our notion of fairness is not a concern about the extent to which contributions to the cost of the health system across households redistribute income. Starting from a society’s efforts to redistribute income, there are, nevertheless, important considerations of fairness that we try to define and quantify. Three issues are critical to this concept of fairness: avoiding catastrophic payments by households, horizontal equity and (to some extent) progressivity of contribution. Further, our approach separates financing from utilisation, so that fairness in financial contribution is determined independently of the health status of the individual or household or the use of health services.

Number of Pages in PDF File: 38

Accepted Paper Series