Are Health Care Payments in Albania Catastrophic? Evidence Form ALSMS 2002, 2005 and 2008

UNU-MERIT Working Paper Series No. 2011-019

21 Pages Posted: 26 Oct 2011

See all articles by Sonila Tomini

Sonila Tomini

Maastricht Graduate School of Governance

Truman G. Packard

World Bank - Europe and Central Asia Region; University of Oxford - Department of Economics

Date Written: April 26, 2011

Abstract

The absent or poorly functioning risk pooling mechanisms and high amounts of out-of-pocket payments for health care expose households to financial risks associated with major illnesses or accidents. The aim of this paper is to analyse the extent to which out-of-pocket health spending impoverish the households in Albania. The study augments the existing evidence by analysing the dynamics of such payments over different years and the weight that informal payments have in the total out-of-pocket health spending. The data used in this study come from Albania Living Standard Measurement Survey (ALSMS) for 2002, 2005 and 2008. We measure headcount catastrophic payments using different thresholds and the decomposition of indicators by expenditure quintiles to understand better their effects. We find that out-of-pocket and informal payments have increased in real value throughout the years. Even though their catastrophic effect has gone down (due also to declining trends in absolute poverty), the effect for the poorest expenditure quintiles remains high. Out-of-pocket payments deepen the poverty headcount and also enlarge the poverty gap and again the effect is larger for the poorest quintiles. Future policy interventions should provide better protection mechanisms for the poor by providing exemption criteria or subsidised transport and should seek to address the widespread informal payments in the country.

Keywords: informal payments, out-of-pocket payments, health care expenditure, impoverishment, Albania LSMS, Albania, living standard, poverty

JEL Classification: E26, I14, I15, I18, I32, I38, O17

Suggested Citation

Tomini, Sonila and Packard, Truman G., Are Health Care Payments in Albania Catastrophic? Evidence Form ALSMS 2002, 2005 and 2008 (April 26, 2011). UNU-MERIT Working Paper Series No. 2011-019, Available at SSRN: https://ssrn.com/abstract=1949713 or http://dx.doi.org/10.2139/ssrn.1949713

Sonila Tomini (Contact Author)

Maastricht Graduate School of Governance ( email )

Keizer Karelplein 19
PO Box 616
Maastricht, 6200MD
Netherlands

Truman G. Packard

World Bank - Europe and Central Asia Region ( email )

1818 H Street
Washington, DC 20433
United States

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

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