Assessing progressivity and catastrophic effect of out-of-pocket payments for healthcare in Canada: 2010–2015

Abstract

Equity in healthcare is an important policy objective of the Canadian healthcare system. Out-of-pocket payments for healthcare (OPPH) by Canadian households account for a substantial share of total healthcare expenditures. Using data from Statistics Canada’s Survey of Household Spending (SHS, n = 33,367), this study examined the progressivity and catastrophic effect of OPPH in Canada over the period 2010 to 2015 inclusive. The Kakwani Progressivity Index (KPI) was used to measure the progressivity of OPPH for each year of the study period. The catastrophic effect of OPPH was calculated using a threshold of 10% of total household consumption. The computed KPI indicated that OPPH are a regressive source of healthcare funding in Canada and the regressivity of OPPH has increased over the study period. This indicates that the distribution of OPPH in Canada is not equitable and the percentage contribution of households from their total consumption to healthcare as OPPH decreases as their consumption increase. The results also suggested that 7% of Canadian households face catastrophic out-of-pocket payments for healthcare (COPPH) over the study period. The proportion of households with COPPH was higher in rural areas compared with urban areas over the study period. Policies to enhance financial risk protection among low-income and rural households are required to improve equity in healthcare financing in Canada.

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Notes

  1. 1.

    Separate sensitivity analyses of progressivity were conducted with the SHS data from 1998 to 2009 to verify this comparability caution. The two sets of data, before and after the data set break (as we discussed in the Data section) were verified as incompatible. These calculations are included in Table A.3.

  2. 2.

    Using the catastrophic threshold of 5 and 3% of total current household consumption indicated that, in average, 20 and 37% of households faced with COPPH in Canada over the study period, respectively (see Table A.4 in the supplementary file).

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Acknowledgements

The analyses for this paper were conducted at the Statistics Canada’s Atlantic Research Data Centre (ARDC) at Dalhousie University, which is part of the Canadian Research Data Centre Network (CRDCN). We would like to thank the CRDCN for facilitating the access to the SHS and the ARDC analyst Heather Hobson for her support and assistance. We also thank Yukiko Asada, Catherine Mah and Majid Taghavi for their comments on the study.

Funding

Mohammad Hajizadeh acknowledges funding provided by the Faculty of Health Research Development Grant, Dalhousie University.

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We accessed the Survey of Household Spending (SHS) through Statistics Canada’s Atlantic Research Data Centre (ARDC). Data accessed through the ARDC, which follows strict disclosure protocols according to the Statistics Canada Acts, is exempt from the research ethics review board.

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Edmonds, S., Hajizadeh, M. Assessing progressivity and catastrophic effect of out-of-pocket payments for healthcare in Canada: 2010–2015. Eur J Health Econ 20, 1001–1011 (2019). https://doi.org/10.1007/s10198-019-01074-x

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Keywords

  • Equity
  • Progressivity
  • Catastrophic payments
  • Out-of-pocket payments
  • Canada

JEL Classification

  • D31
  • D63
  • I14