Determinants of household healthcare expenditure an analysis in vietnam by using of VHLSS 2006

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

I

INSTITUTE OF SOCIAL STUDIES
THE HAGUE
THE NETHERLANDS

UNIVERSITY OF ECONOMICS
HO CHI MINH CITY
VIETNAM

J ;

VIETNAM - NETHERLANDS
PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

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· ; r·

DETERMINANTS OF HOUSEHOLD HEALTHCARE
f.

EXPENDITURE: AN ANALYSIS IN VIETNAM
BY USING OF VHLSS 2006

BY

I

LE PHUONG THAO

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

I.
I,
I

...
HO CHI MINH CITY, NOVEMBER 2011
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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

INSTITUTE OF SOCIAL STUDIES
THE HAGUE
THE NETHERLANDS

UNIVERSITY OF ECONOMICS
HO CHI MINH CITY
VIETNAM

VIETNAM- NETHERLANDS
PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS

DETERMINANTS OF HOUSEHOLD
HEALTHCARE EXPENDITURE: AN ANALYSIS
IN VIETNAM BY USING OF VHLSS 2006
A thesis submitted in partial fulfilment of the requirements for the degree of
MASTER OF ARTS IN DEVELOPMENT ECONOMICS

By

LE PHUONG THAO

Academic Supervisor:

DR. LE THI THANH LOAN

HO CHI MINH CITY, NOVEMBER 2011

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

ACKNOWLEDGEMENTS

Foremost, I would like to express my gratitude to all those who gave me the
possibility to complete this thesis.
I would like to express my deep and sincere gratitude to my advisor Prof. Le
Thi Thanh Loan for the continuous support of my study and research, for her
patience, motivation, enthusiasm, and immense knowledge. Her guidance helped me
in all the time of research and writing of this thesis. And my sincere thanks also go to
Associate Professor Dr. Nguyen Trong Hoai, Co- Director of Vietnam - The
Netherlands Program for M.A. in Development Economics, who has always given me
his encouragements and kindly during the course of my study and thesis research.
I wish to thank my close friend, Pham Tien Thang, who supported me in
finding working papers for references.
Lastly, I owe my loving thanks to my parents and my husband. Without their
encouragement and understanding, it would have been impossible for me to finish this
work.

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

DECLARATION

I declare that "Determinants of household healthcare expenditure: An

analysis in Vietnam using of VHLSS 2006" is my own work, that it has not been
submitted to any degree or examination at any other universities, and that all the
sources used or quoted are indicated and acknowledged by complete references.
Ho Chi Minh City, November 2011
LE PHUONG THAO

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

ABSTRACT

The main purpose of this study is to identify the determinants of household
healthcare expenditure in Vietnam. The main source data for the analysis are from
Vietnam Household Living Standard Survey 2006 (VHLSS 2006). The analysis uses
statistic analysis and Ordinary Least Squares (OLS) estimates to find out the
determinants of healthcare expenditure. First, statistic analysis gives us an overview
of household healthcare expenditure situation in Vietnam. Second, we estimate the
parameters of household healthcare expenditure model by using the Ordinary Least
Squares (OLS) estimates.
The statistic results indicate that in the total of household expenditure, the
household healthcare expenditure made up only 6.37% and in total of household
healthcare expenditure, 72.53% is used in paying user fees at health facilities (health
expenditure for having treatment). The results also present that household healthcare

expenditures differ by expenditure quintiles, health status, health insurance status,
education of household head, gender of house head and ect, ..
The regression results bring out some findings. First, household healthcare
expenditures and household income (that household expenditure is a proxy) have
significant relationship. Second, important determinants of household healthcare
expenditure were household expenditure, household size, health status and health
insurance. The age and education of household head are also important, but their
effects on household healthcare are small. Moreover, there were statistically
significant differences in household healthcare expenditure across regions.
Key words: households; healthcare expenditure, household expenditures, Vietnam.

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

TABLE OF CONTENTS
Page

TABLE OF CONTENTS
ACKNOWLEGEMENTS

3

DECLARATION

4

ABSTRACT

5

LIST OF TABLES

8

LIST OF FIGURES

9
10

LIST OF APENDIXS
CHAPTER I

11

INTRODUCTION

1.1 Problem statements

11

1.2 Objectives of the study

14

1.3 Research questions

15

CHAPTER 2

LITERATURE REVIEW

17

2.1 Definitions
2.1.1

17

Healthcare

17

2.1.2 Household Healthcare expenditure

2.2

18

Theoretical framework for Household Healthcare
18

Expenditure Function
2.2.1

Households and utilization of health care

18

Household characteristics and household healthcare
2.2.2
expenditure
2.2.3

Community characteristics and household healthcare
expenditure

2.3

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An overview of the Empirical studies relates to
23

household healthcare expenditure

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

CHAPTER3

35

METHODOLOGY AND DATA SET

3.1 Econometric Model of the study

35

3.2 Data set

38

3.2.1 Data Source

38

3.2.2 Some definitions ofVHLSS 2006

39
40

3.3 Methodology
3.3.1 Descriptive statistics

41

3.3.2 Estimation strategy

41

CHAPTER4
4.1
4.1.1

RESEARCH FINDINGS FOR HOUSEHOLD

Overview household healthcare expenditure in Vietnam
Healthcare expenditure and household expenditure structure
in Vietnam

43
43

4.1.2 Household characteristics and healthcare expenditure

46

4.1.3 Community characteristics and healthcare expenditure

54

4.2 Estimated results and Explanation

CHAPTERS

56

CONCLUSIONS AND RECOMMENDATIONS

67

5.1 Conclusions

67

5.2 Policy recommendations

68

REFERENCES

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HEALTHCARE EXPENDITURES IN VIETNAM

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

LIST OF TABLES
Page

LIST OF TABLES
Table 4.1

Household characteristics

46

Table 4.2

Income and household healthcare expenditure

48

Table 4.3

Healthcare expenditure by Education of head of household

49

Table 4.4

Healthcare expenditure by gender ofhead of household

50

Table 4.5

Healthcare expenditure by age of head of household

51

Table 4.6

Healthcare expenditure by health status

52

Table 4.7

Healthcare expenditure by Insurance

52

Table 4.8

Healthcare expenditure by household size

53

Table 4.9

Community characteristics

54

Table 4.10

Healthcare expenditure by urban/rural

55

Table 4.11

Healthcare expenditure by regions

55

Table 4.12

Variables - their definitions and expected signs

56

i

Table 4.13

Regression results of the determinants of household
59

healthcare expenditures
Table 4.14

Regression results of the determinants of household
64

healthcare expenditures with significant variables

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

LIST OF FIGURES
LIST OF FIGURES
Figure 4.1

Page

Structure of sources of health expenditures in VietNam,
43

2006
Figure 4.2

Household expenditure structure in year 2006

44

Figure 4.3

Household Healthcare expenditure structure in year 2006

45

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

APPENDIXS
LIST OF APPENDIXS
Appendix 1
Appendix 2

Page

Inter-correlation matrix of all the independent variables
Correlation between household expenditures on

76

healthcare and independent variables
Appendix 3
Appendix4

Checking for Multicollinearity

77

Regression of the model with dependent variable 1s

78

Household per capita healthcare expenditure.
Appendix 5

The best model: Regression of the model with dependent
variable is Household per capita healthcare expenditure.

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

Chapter 1: Introduction
1.1 Problem statement

Health is a fundamental dimension of well-being, a key component part of
human capital and World Bank reports (1993) also indicated that economic growth
(particularly poverty-reducing growth) and education are central to good health ..
Therefore, the main challenge of the health care system is to protect households from
the risks of the consequences of impoverishment from health spending and to ensure
that all households receive health services when they need. The financial burden of
health expenditure may cause households to spend more than their available incomes
and can lead a household into debt. The "Vietnam Joint Annual Health Review 2007"
show that around 34.5% of medium-income inpatients had to borrow to pay for health
services and the burden of health expenditure has resulted in borrowings by many
households. The financial burden of healthcare also causes

an endless cycle of

poverty and ill-health - the burden of out-of-pocket health care payments on

households.
The "doi moi" (renovation) process of Vietnam started in 1986 and after over
20 years of "Doi moi'', Vietnam has gained significant achievements in both the
economy and society, including important achievements in Health sector. The health
reforms have reached profound changes in healthcare utilization including the change
in healthcare financing, healthcare access, healthcare delivery. More attention to
promote the development of the private health sector and liberalization of the
pharmaceutical industry are two of the most important reforms in health sectors.
Beside, the user fees for health services at higher level public health facilities and
health insurance program also have introduced. All of these reforms have had

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

extensive influence on the health sector,

household healthcare expenditure and

household health care-seeking behavior.
Health insurance program started in 1992 by issuing Decree No. 299/HDBT
that the Regulation on Health Insurance was published. Since then, health insurance
has officially become a health financing source that support for healthcare
expenditures. The health insurance fund covers curative care expenditures for the
people that enrolled in social health insurance schemes (compulsory and voluntary).
Besides, the government also issues some health insurance policies that expanded
subsidized health insurance to cover the poor, the near poor and children under 6

years old
And the VHLSS 2006's results show that more than 50% people recetvmg
medical examination and treatment had health insurance, significant increase than the
rate in 2004 even in rural areas. However, coverage of health insurance remains
limited; the financial sustainability of health insurance funding is still low. Rural
people had less opportunity to receive medical examination and treatment in state
hospitals than urban people; they often had to go to commune health centers. The rate
in richest quintile was higher than in the poorest quintile and the difference was
bigger in the rate for out-patients. Differences in utilization of health services between
various populations groups have grown, it coupled with gaps in living standard. Also
according to the VHLSS 2006's results, expenditure for health care of households in
2006 was all increased than in 2004. The average expenditure per person of urban
households and rich households was higher than of rural households and poor
households respectively. In Vietnam, health care expenditures of the poor make up a
higher proportion of their income than the non-poor even though they often try to
restrict their seeking-behavior.

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

Moreover, the report by the World Bank (2001) indicated that there is a very
large in relation to disposable income for the poor. This is a big problem of the health
sector especially in developing countries. The expenditure for health care services is
too high for the poor and many people does not confidence in the quality of local
medial care services may cause this problem.

Therefore, understanding which

determinants effect on household healthcare expenditure is very important, the
findings will help policy makers solve the problems of health care sectors more
effectively.
In the world, many empirical studies research determinants of demand for
health care or health care expenditure (Hjortsberg 1999, Mocan 2000, Rous and
Hotchkiss 1998). These studies have investigated some factors that impact on health
care expenditure such as household economic situations (income, wealth ... ),
household compositions (age, gender, the number of males/females, the number of
children, household size ... ), community characteristics (region, rural/urban ... ) and
type of diseases. In Vietnam, there are few studies that research on health care
expenditure. Trivedi (2002) has studied the major features of health care utilization
patterns in Vietnam.

The study focused on "the determinants of largely self-

prescribed, the use of pharmaceutical drugs, government hospitals, commune health
centers, and private health facilities". Health insurance and household income are
considered as the important factors that effect on health care expenditure. Beside,
seeking behavior of households to choice health care provider types is also analyzed
in the study. By using regression method, the econometric models analyze health care
expenditure in both individual and household level. In another study on health care
expenditure in Vietnam, CCSE - WHO group and Ministry of Health group (2006)
pointed out many factors that had impact on catastrophic healthcare expenditure in
Vietnam. These factors consist: "household living standard status, household income;

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

education level of household head, ethnic status, number of inpatient visits, number
of outpatient visits, number of over-counter visits

for self-treatment, number of

children, number of fertile female and number of elderly persons in household, etc".
And the roles social insurance and target subsidies to the poor in reducing the rate of
household catastrophic health expenditure are also proved in the research .
However, while many decisions are household decisions, the multivariate
household-level studies on this issue has been very few. There are some research
papers that mentioned the producer of health is the family rather than the individual
(Jacobson, 1999; Bolin et al, 1999), and utilization of health care is influenced by
household income through the allocation of household budget. Therefore, this paper
will try to identify the determinants of household health care expenditure in Vietnam
which are useful for planning an effective health care policy. In addition, to improve
equity in health expenditures, we examine vertical equity in health payments by
examining burden of health care expenditures across five income quintiles. This paper
will use quantitative analysis and linear regression framework (the ordinary least
squares (OLS) method) to estimate all key factors that may have impact on household
health care expenditure. The Vietnam Household Living Standard Survey (VHLSS)
2006 data with more detail questionnaires of health section is the main data source
used for regression the model. Besides, the data from the Ministry of Health reports is
also used for descriptive analysis in this paper.
1.2 Objectives of the study
The aim of this paper is to investigate the factors that may have influence on
household health care expenditure in Vietnam. More specifically, this study attempt to

explore the follow questions:

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

-Which factors determine households' health care expenditure in Vietnam?
- What extent significant determinants impact on health care expenditure?
- Is there a difference between the health care expenditure patterns of poor households
and those ofbetter-offhouseholds?
Knowing the answers to these questions is very important for policy makers,
these can help them in making informed decisions regarding policies intended to
improve social welfare. For example, for the households that they are lack of the
ability to spend more for healthcare, the government should provide only very basic
healthcare at low price. However, for the households that they have the ability and the
willingness to spend more on healthcare and they ready pay for good quality health
care, then the government can expand more options. By offering a wider variety of
health services, the government still recover a considerable fraction of the costs.
1.3 Research questions

Specifically, the objective of the thesis

IS

to answer the following research

questions:

- How economic circumstances, household characteristics and community factors
effect on household health care expenditure?
- How are the difference in 5 (five) income quintiles correlated to health care
expenditure?
- Does Health insurance help reducing household health care expenditure?

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

- What the Government should do to reduce financial burden of healthcare
expenditure for the poor?
The results of this research may help the planners give an effective health care
policy that reduce the burden of health care expenditure for households, especially for
the poor.
This paper is organized in the following way. It includes five chapters: Chapter
I is Introductory section; Chapter II - Literature review, this chapter introduces a
theoretical framework that reviews theories and empirical studies related to the topic;
Chapter III - Methodology and data set, it describes the data and the methodology
that is used in the analysis; Chapter IV - Determinants of household healthcare in
Vietnam, by using the descriptive method and regressing the econometric model, it
analyses overview households' healthcare expenditure and examines determinants of
households' health care expenditure in Vietnam; And final, Chapter V- Conclusion
and Recommendations, this chapter summarizes all analysis and findings in previous
chapters and gives some policy recommendations.

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

Chapter 2: Literature Review
2.1 Definitions:
2.1.1 Healthcare:

Health care is not an economic term and its definition is very broad. These are
two of many definitions of Healthcare:
Appelbaum (1999) said that: "health care means any care, treatment, or
procedure by a health care provider:
- To diagnose, evaluate, rehabilitate, manage, treat, or maintain the physical or
mental condition of an individual; or
- That affects the structure or any function of the human body.
- Health care includes participation in research that, considering the risks and benefits
of participation, presents a reasonable prospect of direct medical benefit to an
individual".
According to the Dependent Adults Act in the United State: "Health Care
includes:
- Any examination, diagnosis, procedure or treatment undertaken to prevent any
disease or ailment,
- Any procedure undertaken for the purpose of preventing pregnancy
- Any procedure undertaken for the purpose of an examination or a diagnosis,

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

- Any medical, surgical, obstetrical or dental treatment, and
- Anything done that is ancillary to any procedure, treatment, examination or
diagnosis".
2.1.2 Household Healthcare expenditure:
I

•

The MOH report (2008) definite that:
Household health expenditure is the total spending of a household on all of its health

related needs, including preventive, promotive and curative care. Household health
expenditures can include pre-payment before an illness (e.g. to purchase health
insurance) or direct out-of-pocket health expenditures when using health services (e.g.
paying hospital user fees).
Direct out-of-pocket payment for health care refers to the expenditures households

make directly when they use services, primarily purchase of drugs, payment of
hospital user fees, diagnostic service fees and other indirect expenses related to
seeking medical care at state or private facilities (including self-medication).
2.2 Theoretical framework for Household Health Expenditure Function
2.2.1 Households and utilization of health care:
First, we start with studies of utilization of health care because some studies

used household health care expenditure is a proxy of health care utilization.

' theory, Grossman's model of health capital
Base on the human capital
(Grossman, 1972,2000) is a formal model to analyze the relationship of health capital
and income and education. Income and education are the most influential factors for

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

health care utilization. Bolin et al, 1999 also show the relationship between household
income and health care utilization. Some studies also concluded that income and
education of household head have important impact on household health care
expenditure (Himanshu, 2007; Parker, Wong, 1997). Beside, other factors such as age
also impact on utilization because age reflects on perceived benefit and income. And
poverty impacts on limiting a patient's ability to pay for medical care so that it effect
on health care utilization largely (Blanchard, 2005).
In some studies, the authors mentioned about access factors that may influence
to utilization of health care. In reality, the largest determinant of seeking care may be
the expected access cost and the individual often take the first contact with the system
healthcare. Le5 Grand (1982) argues that access cost includes both monetary costs
and time costs, it consists some factors such as out of pocket payments, distance to
health facilities, waiting time at the facility etc, i.e. More specifically, monetary costs
embrace health services fees and costs for traveling to the health facilities, while time

costs include time to reach the facility, waiting time at the facility and time to get
advice from the health consultants. Access costs are usually an important determinant
of health care utilization, especially it is more meaning in analyzing the differences in
health care utilization across different social groups in developing countries (Gertler
and van der Gaag, 1990).
Jacobson (2000) argues that the individual does not produces "good health",
"good health" is produced by the family. Therefore, the Grossman's model is
extended into a new model with the producer of health is the family. With the new
model, Jacobson (2000) concluded that the production of health not only use the
individuals' own income but also the family's combined resources. The family
allocate the investments in health capital and it will not try to distribute the equal
health capital to each member of the family. Therefore, it leads to the marginal

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

benefits equal marginal net cost of health capital. Moreover, the resource allocations
within a household are influenced by the individual members of a household. The
most obvious examples indicate that there is a difference in allocating household
budget between the households without children and the household with children. The
household with children will allocate a larger share of the budget to food than
households without children. A natural parallel to household health expenditure, it

would be that households with children allocate a larger share of the budget to health
expenditure compared to households without children.

2.2.2 Household characteristics and household healthcare expenditure:
The next, we review some empirical studies that have considered how

households allocate resources.
The theoretical literature on household economics that Becker had given in
1964 and 1965 extended the neoclassical model of consumer demand to household. In
his model, the assumption is "all household members are assumed to maximize a
household level welfare function" and therefore, the utility function is a joint utility
function. All available resources of the household are pooled and then reallocated
base on a common rule and income is allocated in such a way that the marginal rate
of substitution between any two consumption goods is the same as for any other pair.
However, this model is not suitable in case intra household allocations. It has been
suggested that instead of considering the bargaining and negotiations that actually
occur within a household, intra household allocations should be modeled with
bargaining models (see e.g. Manser and Brown, 1980; McElroy, 1990, Bolin et al,
1999). Moreover, there are some other models have been suggested, Behrman et al
(1982; 1986) suggest that modeling intra household allocations should assume a
specific structure for parental preferences, while others propose that a Pareto efficient

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

outcome should be used (Chiappori, 1988; Kooreman, 1990). While the Beckerian
model pool all resources, these above model allow the differences between household
members in preferences,

resources are allocated towards goods that different

household members desire.
The next model that we review here is one of the simplest models of household
consumption of Samuelson (1956). It assumed that "the household income always is
divided in pre-specified proportions between household members". Each household
member maximizes utility subject to the given budget constraint by choosing her or
his own consumption bundle. Applying this for heath care expenditure, we see that
each household member would try to get her or his own utility of health care
consumption and not the benefits for the household as a unit. Therefore, for the
household that do not have common preferences,

Bargaining models from

cooperative game theory may be the best choice in this situation. Lundberg and Pollak
(1996) had use Nash bargaining models for their research. However, the experiences
indicate that these models are only suitable in a two-person household.
More specifically, almost the models above mention some main factors that
impact on household healthcare expenditure as: household economics (income,
wealth,

poverty,

employment ... ),

demographic

characteristics

of household

(household size, number of children, number of women in fertile age-group and the
characteristics of household's head ... ).
In most developing countries, the role of the head of household is relatively
important. In general, according to the hierarchical decision-making process in the
households, the household head may decide on several issues, including the level of
household healthcare expenditure. The household heads have education is included to
reflect knowledge of health and medicine in the household, as education and

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

healthcare utilization have positive correlation (e.g., Ichoku and Leibbrandt 2003;
Lindelow 2004). It is commonly said that the decision of allocating the household
expenditures on food is included to reflect the poverty or budget constraints and
Makinen et al. (2000) also show that "relative income influences both the decision to
seek care and the type of care sought" .. Finally, resource-constrained households with
multiple sick members face deciding who to treat through inpatient care and who to
treat through other methods. The three alternative-specific variables each reflect the
costs and benefits associated with treatment at each type of facility; presumably,
lower minimum spending thresholds, higher maximum benefit levels, and lower

average costs of treatment increase the attractiveness of each hospital type. Moreover,
some other factor that likely influence both the decision to seek care and hospital
choice such as age, sex, disabilities, and emigration status. For example, when get
sick, women are more likely to seek care for sickness than men in the U.S. and China
respectively (Gao and Yao 2006). Similarly, Reinhardt (2000) reveals that age have
positive impact on both the quantity of healthcare expenditure and total spending. The
disabled are more likely to seek healthcare than people without physical limitations
(Sommers 2006-2007). By contrast, people who emigrate have better self-reported
health status and lower incidence of illness (Hesketh et al. 2008), suggesting that they
may have different preferences for healthcare than non-migrants.

2.2.3 Community characteristics and household healthcare expenditure:
Final, we mention about some literatures of community characteristics and
household healthcare expenditure. Obviously, each region has distinct features of
geography, demography, and custom so that the household healthcare expenditure
living in different regions also are different. Place of residence, for example, whether
one lives in a rural or an urban area, may indicate geographic proximity to a source of

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

care as well as local attitudes about health care (Woottipong, 2001). Household health
care expenditure is higher for urban than rural household.
In short, consumption behavior depends on demographic and socio-economic
statuses. From the above discussion of theories, we see that healthcare utilization may
be affected not only by the household composition (such as household size, the

number of adult females, males, the number of fertile women and children within the
household) but also individual characteristics of household members, household
head's characteristic. Some important determinants of healthcare utilization relating
to the household head's characteristics are Education level of household head, sex of
household head, age of household (Himanshu, 2006). Besides, regions with different
socio-economic conditions also have impact on household health care expenditure
(Margherita and Theodore, 2002; Ha nguyen, Peter and Ulla, 2002). Moreover, the
resident place of household (rural/urban) is an important factor that may have impact
on household healthcare expenditure (Woottipong, 2001 ).

2.3 An Overview of the Empirical studies relates to household healthcare
expenditure:
There are not many empirical studies mentions about determinants of
household health care expenditure in developing countries as well as in Vietnam. We
can list here some main empirical studies:
Firstly, Himanshu (2006, 2007) studied the determinants of household
healthcare expenditure in Tribal and Urban Orissa (India) with three working papers.
Two of these working papers explored the influence of household income and
household head's education on household healthcare expenditure in Tribal and Urban
Orissa. The regression analysis and descriptive statistics is used to substantiate the

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

objective. Three variables are used in the model, including: household health
expenditure, household income and education of the household head; and the model

that the author used in both studies is a linear regression model: PHE

= ~1

+ ~2 PHI +

~3EDN

While:
The model use per head health expenditure (PHE) to represent the household
health expenditure, it is calculated by dividing total annual health expenditure of the
household by the household size.
Similarly, per head income of the household (PHI) is used for household
income variable the regression analysis, it is calculated by dividing total annual
household income by size of the household.
And, education is a dummy variable in the regression analysis, education
equal 1 if those head of the households is educated and equal 0 if those head of the
households is uneducated.
The results of these regression analysis showed that: the linear regression
models are fitted as: PHE = 31.37 + 0.43PHI + 0.06EDN for the case in Tribal area
and PHE = -696.046 + 0.82PHI + 0.03EDN for the case in urban area. The results
indicates that in Tribal, rural and urban areas, both income and education have the
positive influence of on health expenditure.
The influence of income on healthcare expenditure is different between
households living in Tribal, rural and urban areas. In urban area, income has the most
influence on healthcare expenditure and it has the least influence in Tribal area. The
reason is because of the lower per head income of the household in Tribal and rural
area than in urban area.

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Determinants of household health care expenditure: An analysis in Vietnam using of VHLSS 2006

However, the influence of education on healthcare expenditure gtves an
interesting finding: "healthcare expenditure in Tribal area is double that of rural and
urban areas. It means that an educated person on an average spends six paise more in
a rupee than the uneducated person on health expenditure in tribal area where as an
educated person in both rural and urban areas, on an average spends only three paise
more in a rupee than the uneducated person". The relative values of education for
Trial people are more than the people of rural and urban areas cause this results.
In the remaining working paper, Himanshu (2006) mentions about the impact
of gender on household healthcare expenditures in Urban Orissa. By using the same
methodology in the two studies above, the linear regression model was suggested as:
PHE =

Bl + B2 PMHE + B3 PFHE.
While:
PHE is per Capita Health Expenditure, it is calculated by "dividing total annual

health expenditure of the household by the household size".
PMHE is per male health expenditure, it is calculated by "dividing total annual
male healthcare expenditure of the household by number of male members of the
household".
PFHE is per female health expenditure,

it is calculated by "dividing total

annual female healthcare expenditure of the household by number of female members
of the household".
After running regress10n, the author has concluded that "biologically

determined sex and socially constructed gender have strong bearing on the household
out-ofpocket health expenditure. The study shows that there is a significant
difference between male and female out-ofpocket health expenditure in urban area".
However, out-of-pocket health expenditure of females living in urban is higher than

VNP

Class 13