Health equity and financial protection streamline analysis with adept software pdf

Health Equity and Financial Protection
Wagstaff, Bilger, Sajaia, and Lokshin
STREAMLINED ANALYSIS WITH ADePT SOFTWARE
www.worldbank.org/adept
Two key policy goals in the health sector are equity and fi nancial protection. New methods, data, and powerful
computers have led to a surge of interest in quantitative analysis that permits the monitoring of progress toward these
goals, as well as comparisons across countries. ADePT is a new computer program that streamlines and automates
such work, ensuring that the results are genuinely comparable and allowing them to be produced with a minimum of
programming skills.
This book provides a step-by-step guide to the use of ADePT for the quantitative analysis of equity and fi nancial
protection in the health sector. It also elucidates the concepts and methods used by the software and supplies more-
detailed, technical explanations. The book is geared to practitioners, researchers, students, and teachers who have some
knowledge of quantitative techniques and the manipulation of household data using such programs as SPSS or Stata.
“During the past 20 years, an increasingly standardized set of tools have been developed to analyze equity in health
outcomes and health fi nancing. Hitherto, the application of these analytical methods has remained the province of
health economists and statisticians. This book and the accompanying software democratize the conduct of such analyses,
offering an easily accessible guide to equity analysis in health without requiring sophisticated data analysis skills.”
Sara Bennett, Associate Professor, Department of International Health, Bloomberg School of Public Health,
Johns Hopkins University, Baltimore, Maryland, United States
“As the international health community becomes increasingly focused on monitoring the impact of universal coverage
initiatives, ADePT Health will help make the standard techniques more accessible to policy makers and analysts,
increase the comparability of health equity and fi nancial protection measures, and aid in generating the evidence
needed to support policy.”
Kara Hanson, Reader in Health System Economics, Health Policy Unit, London School of Hygiene and
Tropical Medicine, United Kingdom
“The ADePT software and manual make it possible for researchers without extensive statistical training to perform a
range of analyses that will provide an important evidence base for introducing universal coverage reforms and for
monitoring if these reforms are achieving their objectives. The ADePT initiative is an exciting and timely development
that will enable researchers in low- and middle-income (as well as high-income) countries to undertake health and
health system equity analyses that would previously have been lengthy and extremely resource intensive.”
Di McIntyre, Professor, School of Public Health and Family Medicine, University of Cape Town, South Africa

Streamlined Analysis with ADePT Software is a new series that provides academics, students, and policy practitioners
with a theoretical foundation, practical guidelines, and software tools for applied analysis in various areas of
economic research. ADePT Platform is a software package developed in the research department of the World Bank
(see www.worldbank.org/adept). The series examines such topics as sector performance and inequality in education,
the effectiveness of social transfers, labor market conditions, the effects of macroeconomic shocks on income
distribution and labor market outcomes, child anthropometrics, and gender inequalities.
Health Equity
and Financial
Protection
Adam Wagstaff
Marcel Bilger
Zurab Sajaia
Michael Lokshin
ISBN 978-0-8213-8459-6
SKU 18459

Health Equity and
Financial Protection

Health Equity and
Financial Protection
Adam Wagstaff
Marcel Bilger
Zurab Sajaia
Michael Lokshin
STREAMLINED ANALYSIS WITH ADePT SOFTWARE
© 2011 The International Bank for Reconstruction and Development / The World Bank
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Washington, DC 20433
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Internet: www.worldbank.org
All rights reserved
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This volume is a product of the staff of the International Bank for Reconstruction and
Development / The World Bank. The findings, interpretations, and conclusions expressed in
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Bank or the governments they represent.
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ISBN: 978-0-8213-8459-6
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v
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xv
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xvii
Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .xix
Chapter 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
PART I: Health Outcomes, Utilization, and Benefit
Incidence Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Chapter 2
What the ADePT Health Outcomes Module Does . . . . . . . . . . . . . . . . .5
Measuring Inequality in Outcomes and Utilization . . . . . . . . . . . . . . . . . . . . .5
Basic Inequality Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Standardization for Demographic Factors* . . . . . . . . . . . . . . . . . . . . . . . . .7
Accounting for Inequality Aversion* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Trading Off the Average against Inequality* . . . . . . . . . . . . . . . . . . . . . . . .8
Explaining Inequalities and Measuring Inequity* . . . . . . . . . . . . . . . . . . . . . .8
Contents
vi
Benefit Incidence Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Basic BIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
BIA under Alternative Assumptions* . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Chapter 3
Data Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Household Identifier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Living Standards Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Direct Approaches to Measuring Living Standards . . . . . . . . . . . . . . . . . .16
Indirect Approaches to Measuring Living Standards . . . . . . . . . . . . . . . .17

Health Outcome Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Child Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Anthropometric Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Other Measures of Adult Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Health Utilization Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Variables for Basic Tabulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Weights and Survey Settings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Determinants of Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Determinants of Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Information on Utilization for Benefit Incidence Analysis . . . . . . . . . . . . . .22
Fees Paid to Public Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
NHA Aggregate Data on Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Chapter 4
Example Data Set . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Household Identification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Living Standards Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Health Outcome Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Health Utilization Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Variables for Basic Tabulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Weights and Survey Settings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Determinants of Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Determinants of Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Utilization Variables for Benefit Incidence Analysis . . . . . . . . . . . . . . . . . . .30
Contents
vii
Fees Paid to Public Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
NHA Aggregate Data on Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
Chapter 5
How to Generate the Tables and Graphs . . . . . . . . . . . . . . . . . . . . . . .33
Main Tab . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Determinants of Health or Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Benefit Incidence Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Chapter 6
Interpreting the Tables and Graphs . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Original Data Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Basic Tabulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Inequalities in Health Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Concentration of Health Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
Explaining Inequalities in Health . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
Decomposition of the Concentration Index . . . . . . . . . . . . . . . . . . . . . . . . . .54
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
Inequalities in Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
Explaining Inequalities in Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57

Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
Contents
viii
Use of Public Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Payments to Public Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
Health Care Subsidies: Cost Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . .62
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
Concentration of Public Health Services . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
Chapter 7
Technical Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
Measuring Inequalities in Outcomes and Utilization . . . . . . . . . . . . . . . . . . .71
Note 1: The Concentration Curve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
Note 2: The Concentration Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
Note 3: Sensitivity of the Concentration Index to the Living
Standards Measure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
Note 4: Extended Concentration Index . . . . . . . . . . . . . . . . . . . . . . . . . . .77
Note 5: Achievement Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
Explaining Inequalities and Measuring Inequity . . . . . . . . . . . . . . . . . . . . . . .79
Note 6: Demographic Standardization of Health
and Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
Note 7: Decomposition of the Concentration Index . . . . . . . . . . . . . . . . .82

Note 8: Distinguishing between Inequality and Inequity . . . . . . . . . . . . . .83
Benefit Incidence Analysis (BIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
Note 9: Public Health Subsidy in Standard BIA . . . . . . . . . . . . . . . . . . . .84
Note 10: Public Health Subsidy with Proportional
Cost Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86
Note 11: Public Health Subsidy with Linear
Cost Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
Contents
ix
PART II: Health Financing and Financial Protection . . . . . . . . . .93
Chapter 8
What the ADePT Health Financing Module Does . . . . . . . . . . . . . . . . .95
Financial Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96
Catastrophic Health Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96
Poverty and Health Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98
Progressivity and Redistributive Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98
Progressivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99
Redistributive Effect* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
Chapter 9
Data Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
Ability to Pay (Consumption) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
Out-of-Pocket Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
Nonfood Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105
Poverty Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105
Prepayments for Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106
NHA Data on Health Financing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .108
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .108
Chapter 10
Example Data Sets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
Financial Protection: Vietnam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
Ability to Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
Out-of-Pocket Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
Nonfood Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
Poverty Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
Progressivity and Redistributive Effect: Egypt . . . . . . . . . . . . . . . . . . . . . . . .110
Ability to Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
Out-of-Pocket Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
Prepayments for Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
NHA Data on Health Financing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
Incidence Assumptions for Health Care Payments . . . . . . . . . . . . . . . . .112
Contents
x
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113
Chapter 11
How to Generate the Tables and Graphs . . . . . . . . . . . . . . . . . . . . . . .115
Financial Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .116
Progressivity and Redistributive Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . .118
Chapter 12
Interpreting the Tables and Graphs . . . . . . . . . . . . . . . . . . . . . . . . . . . .121
Original Data Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .122
Basic Tabulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123

Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123
Financial Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .125
Distribution-Sensitive Measures of Catastrophic Payments . . . . . . . . . . . . .127
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128
Measures of Poverty Based on Consumption . . . . . . . . . . . . . . . . . . . . . . . . .129
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .129
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130
Share of Household Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130
Health Payments and Household Consumption . . . . . . . . . . . . . . . . . . . . . .131
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .131
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .132
Progressivity and Redistributive Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133
Progressivity of Health Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .134
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .136
Contents
xi
Decomposition of Redistributive Effect of Health Financing . . . . . . . . . . . .137
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138
Concentration Curves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .139
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141

Distribution of Health Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .142
Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .142
Interpreting the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .143
Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .143
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .143
Chapter 13
Technical Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
Financial Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
Note 12: Measuring Incidence and Intensity of Catastrophic
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
Note 13: Distribution-Sensitive Measures of Catastrophic
Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147
Note 14: Threshold Choice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148
Note 15: Limitations of the Catastrophic Payment Approach . . . . . . . .149
Note 16: Health Payments–Adjusted Poverty Measures . . . . . . . . . . . . .150
Note 17: Adjusting the Poverty Line . . . . . . . . . . . . . . . . . . . . . . . . . . . .152
Note 18: On the Impoverishing Effect of Health Payments . . . . . . . . . .153
Progressivity and Redistributive Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154
Note 19: Measuring Progressivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154
Note 20: Progressivity of Overall Health Financing . . . . . . . . . . . . . . . .155
Note 21: Decomposing Redistributive Effect . . . . . . . . . . . . . . . . . . . . . .156
Note 22: Redistributive Effect and Economic Welfare . . . . . . . . . . . . . .158
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .158
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .158
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .161
Figures
2.1: Concentration Curve and Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
7.1: Weighting Scheme for Extended Concentration Index . . . . . . . . . . . .78
Contents
xii

8.1: Health Payments Budget Share and Cumulative Percentage of
Households Ranked by Decreasing Budget Share . . . . . . . . . . . . . . . . .97
8.2: Kakwani’s Progressivity Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100
13.1: Health Payments Budget Share and Cumulative Percentage of
Households Ranked by Decreasing Budget Share . . . . . . . . . . . . . . . .146
13.2: Pen’s Parade for Household Expenditure Gross and Net of
Out-of-Pocket Health Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .150
Graphs
G1: Concentration Curves of Health Outcomes . . . . . . . . . . . . . . . . . . . . .48
G7a: Decomposition of the Concentration Index for Health
Outcomes, Using OLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
G3: Concentration Curves of Public Health Care Subsidies,
Standard BIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
G4: Concentration Curves of Public Health Care Subsidies,
Proportional Cost Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
G5: Concentration Curves of Public Health Care Subsidies,
Linear Cost Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
GF1: Health Payment Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .131
GF2: Effect of Health Payments on Pen’s Parade of the
Household Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .132
GP1: Concentration Curves for Health Payments, Taxes . . . . . . . . . . . . . .140
GP2: Concentration Curves for Health Payments, Insurance,
Out of Pocket . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141
GP3: Health Payment Shares by Quintiles . . . . . . . . . . . . . . . . . . . . . . . . . .142
Screenshots
5.1: Main Tab . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
5.2: Inequalities in Health or Utilization Tab . . . . . . . . . . . . . . . . . . . . . . . .36
5.3: Benefit Incidence Analysis Tab . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
11.1: Financial Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .116
11.2: Progressivity and Redistributive Effect . . . . . . . . . . . . . . . . . . . . . . . .118

Tables
2.1: Data Needed for Different Types of ADePT Health
Outcome Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Original Data Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Contents
xiii
H2: Health Outcomes by Individual Characteristics . . . . . . . . . . . . . . . . . .44
H3: Health Inequality, Unstandardized . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
H6: Decomposition of the Concentration Index for Health
Outcomes, Linear Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
H8a: Fitted Linear Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
H8c: Elasticities, Linear Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
H8e: Concentration Index of the Covariates . . . . . . . . . . . . . . . . . . . . . . . . .51
U3: Inequality in Health Care Utilization, Unstandardized . . . . . . . . . . . .56
U6: Decomposition of the Concentration Index for Utilization
Values, Using OLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
S1: Utilization of Public Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
S2: Payments to Public Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
S3: Health Care Subsidies, Constant Unit Cost Assumption . . . . . . . . . . .63
S4: Health Care Subsidies, Proportional Cost Assumption . . . . . . . . . . . . .63
S5: Health Care Subsidies, Constant Unit Subsidy Assumption . . . . . . . .64
9.1: Data Needed for Different Types of ADePT Health
Financing Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
9.2: Common Incidence Assumptions for Prepayments in
Progressivity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107
10.1: Financing Assumptions, Egypt Example . . . . . . . . . . . . . . . . . . . . . . .112
Original Data Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .122
1: Sources of Finance by Household Characteristics . . . . . . . . . . . . . . . .123
F1: Incidence and Intensity of Catastrophic Health Payments . . . . . . . . .125
F2: Incidence and Intensity of Catastrophic Health Payments,

Using Nonfood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126
F3: Distribution-Sensitive Catastrophic Payments Measures . . . . . . . . . . .128
F4: Distribution-Sensitive Catastrophic Payments Measures,
Using Nonfood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128
F5: Measures of Poverty Based on Consumption Gross and Net
of Spending on Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .129
P1: Average Per Capita Health Finance . . . . . . . . . . . . . . . . . . . . . . . . . . .133
P2: Shares of Total Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135
P3: Financing Budget Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135
P4: Decomposition of Redistributive Impact of Health Care
Financing System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .137
Contents

xv
World Bank researchers have a long tradition of developing and applying
methods for the analysis of poverty and inequality, often working with col-
laborators. And the Bank’s researchers have often tried hard to make their
methods accessible to others, through “how-to” guides and training courses.
In that tradition, this book is the first in a new series called Streamlined
Analysis with ADePT Software. ADePT is an exciting new software tool
developed by the Bank’s research department, the Development Research
Group. ADePT automates the production of standardized tables and charts
using a wide range of methods in distributional analysis, including some
advanced methods that are technically demanding and not easily accessible
to most potential users. This software makes these sophisticated methods
accessible to analysts who have limited programming skills. (ADePT uses
the statistical software package Stata but does not require that users know
how to program in Stata, or even to have Stata installed on their comput-
ers.) But we also hope that ADePT will be valuable to more technically
inclined researchers too, by speeding up the production of results and by

increasing their reliability and comparability.
The present book provides a guide to ADePT’s two health modules:
the first module covers inequality and equity in health, health care uti-
lization, and subsidy incidence; the second, health financing and financial
Foreword
xvi
protection. It also provides introductions to the methods used by ADePT
and a step-by-step guide to their implementation in the program.
We hope you find this guide useful in your work. Please give us feedback
on ADePT (see www.worldbank.org/adept) and this volume, as we wish to
make them even more useful in the future.
Martin Ravallion
Director, Development Research Group
The World Bank
Foreword
xvii
We are grateful to our peer reviewers Caryn Bredenkamp, Owen O’Donnell,
and Ellen van de Poel for their excellent comments on the previous draft of
the manuscript for this book. Their comments led to improvements not
only in the manuscript but also in the ADePT software. Caryn and Ellen
continued to provide invaluable feedback on ADePT afterwards, as did
Sarah Bales and Leander Buisman. We are also grateful to the Bank’s Health,
Nutrition and Population unit for financial support in the production of
this book.
Acknowledgments

xix
ADePT Automated DEC Poverty Tables
BIA benefit incidence analysis
BMI body mass index

CHC commune health center
CPI consumer price index
DEC Development Economics (Vice Presidency at the World Bank)
ID identification
NHA National Health Account
OLS ordinary least squares
OOP out of pocket
PPP purchasing power parity
VHLSS Vietnam Household Living Standards Survey
Abbreviations

1
Chapter 1
ADePT is a software package that generates standardized tables and charts
summarizing the results of distributional analyses of household survey data.
Users input a Stata (or SPSS) data set, indicate which variables are which,
and tell ADePT what tables and charts to produce; ADePT then outputs the
results in a spreadsheet with one page for each requested table and chart.
ADePT requires only limited knowledge of Stata and SPSS: users need to
be able to prepare the data set, but do not need to know how to program
Stata to undertake the often complex analysis that ADePT performs.
ADePT frees up resources for data preparation, interpretation of results,
and thinking about the policy implications of results. Users can easily assess
the sensitivity of their results to the choice of assumptions and can repli-
cate previous results in a straightforward way. ADePT also reduces the risk
of programming errors and spurious variations in results that arise as a result
of different ways of implementing methods computationally.
ADePT Health is just one of several modules; other modules include
Poverty, Inequality, Labor, Social Protection, and Gender. ADePT Health
has two submodules: Health Outcomes and Health Financing. Together

these modules cover a wealth of topics in the areas of health equity and
financial protection.
This manual is divided into two parts corresponding to each of these sub-
modules. The following topics are covered:
• Part 1, Health Outcomes: (a) measuring inequalities in outcomes
and utilization (with and without standardization for need), (b) decom-
posing the causes of health sector inequalities, and (c) analyzing
Introduction
2
the incidence of government spending (that is, benefit incidence
analysis).
• Part 2, Health Financing: (a) financial protection, including cata-
strophic payments and impoverishing payments, and (b) the progres-
sivity and redistributive effect of health financing.
Each part is divided into six chapters:
• Chapters 2 and 8 explain what ADePT does in each area and pro-
vide a brief introduction to the methods underlying ADePT. The
methods are widely accepted in the literature and are outlined in
more detail in Analyzing Health Equity Using Household Survey
Data, by Owen O’Donnell, Eddy van Doorslaer, Adam Wagstaff,
and Magnus Lindelow (O’Donnell and others 2008). This first sec-
tion and all the other sections of this manual draw heavily on this
book.
• Chapters 3 and 9 explain how to prepare the data for ADePT. This is
key to the successful use of ADePT, as the software has no data
manipulation capability.
• Chapters 4 and 10 guide users through example data sets, which are
used in the worked examples in the sections that follow.
• Chapters 5 and 11 show users how to generate the tables and charts
that ADePT is capable of producing. Using a worked example with

real data, the manual provides step-by-step instructions for using
ADePT.
• Chapters 6 and 12 walk users through interpretation of the tables and
charts produced by ADePT. Again, this is done through a worked
example using real data.
• Chapters 7 and 13 contain technical notes explaining in more detail
the methods used in the program.
Reference
O’Donnell, O., E. van Doorslaer, A. Wagstaff, and M. Lindelow. 2008.
Analyzing Health Equity Using Household Survey Data: A Guide to
Techniques and Their Implementation. Washington, DC: World Bank.
Health Equity and Financial Protection
PART I
Health Outcomes,
Utilization, and
Benefit Incidence
Analysis