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CATA meets IMPOV: a unified approach to measuring financial protection in health, Volume 1
Author:Wagstaff, Adam; Eozenou, Patrick Hoang-Vu; Country:World;
Date Stored:2014/05/07Document Date:2014/05/01
Document Type:Policy Research Working PaperSubTopics:Regional Economic Development; Rural Poverty Reduction; Economic Theory & Research; Health Systems Development & Reform; Consumption
Language:EnglishRegion:The World Region
Report Number:WPS6861Collection Title:Policy Research working paper ; no. WPS 6861
Volume No:1  

Summary: Up to now catastrophic and impoverishing payments have been seen as two alternative approaches to measuring financial protection in health. Building on the previous literature, the authors propose a unified methodology in which impoverishing and catastrophic payments are mutually exclusive outcomes. They achieve this by expressing out-of-pocket payments as a ratio of 'discretionary' consumption, defined as the amount by which total consumption (gross of out-of-pocket payments) exceeds the poverty line. This allows the authors to identify both households who are impoverished by out-of-pocket payments (their ratio exceeds one) and households who are pushed even further into poverty by out-of-pocket payments (their ratio is negative); the authors call such payments 'immiserizing'. Households experiencing 'catastrophic' payments are a subset of those who incur out-of-pocket payments but who are neither impoverished nor immiserized by them. Two alternative definitions of catastrophic payments are offered: those that absorb more than a pre-specified fraction of discretionary consumption; and those that leave a household's nonmedical consumption (total consumption net of out-of-pocket spending) below a pre-specified multiple of the poverty line. The authors also offer a simple financial protection index that reflects the percentages of households incurring immiserizing, impoverishing, catastrophic, non-catastrophic, and zero out-of-pocket payments. They illustrate their unified approach with data from the World Health Survey, using international poverty lines and a catastrophic payment threshold of 40 percent.

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