(Luận văn thạc sĩ) inequity in household health care finance in vietnam

MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY


TRAN NGOC THANH

INEQUITY IN HOUSEHOLD HEALTH CARE FINANCE
IN VIETNAM

MASTER OF ART IN DEVELOPMENT ECONOMICS
(SPECIALIZATION IN HEALTH ECONOMICS AND MANAGEMENT)

Ho Chi Minh City – 2015


MINISTRY OF EDUCATION AND TRAINING
UNIVERSITY OF ECONOMICS HO CHI MINH CITY


TRAN NGOC THANH

INEQUITY IN HOUSEHOLD HEALTH CARE FINANCE
IN VIETNAM

Major : Economics
Code

: 60310105

MASTER OF ART IN DEVELOPMENT ECONOMICS
(SPECIALIZATION IN HEALTH ECONOMICS AND MANAGEMENT)

Advisor:

Dr. Pham Khanh Nam
Dr. ArdeshirSepehri

Ho Chi Minh City – 2015


WORD OF WARRANTY
My name: Tran Ngoc Thanh
As master student, grade Economics and Health Administration, the 2013-2015,
Faculty of Development Economics, University of Economics Ho Chi Minh City.
I swear this is my research . The data and conclusions of Research presented in this
thesis are honest and have not been published in other research.
I am responsible for my research.

Student

Tran Ngoc Thanh


CONTENTS
LIST OF ABBREVIATIONS
CONTENT OF TABLE
CONTENT OF FIGURE
CHAPTER 1: INTRODUCTION ...............................................................................1
1.1.

Background ....................................................................................................1

1.2

Research Objectives ......................................................................................3

1.3

Data source ....................................................................................................3

1.4

Study Design..................................................................................................3

CHAPTER 2: LITERATURE REVIEW ....................................................................4
2.1.

Definition .......................................................................................................4

2.1.1.

Social equity ...........................................................................................4

2.1.2.

Equity in health care ...............................................................................5

2.1.3.

Inequality and Inequity ...........................................................................6

2.1.4.

Vertical equity and Horizontal equity.....................................................9

2.1.5.

Ability to pay – ATP...............................................................................9

2.2.

Concentration index and Concentration curve ..............................................9

2.3 1.

Concentration index ...................................................................................9

2.3 2.

Concentration curve .................................................................................10

2.3.

Katwani indices and Concentration curves .................................................10

2.4.

Inequity or Progressivity of health care finance ..........................................12

2.5.

Decomposition .............................................................................................13

2.6.

Review emperical studies about health equity finance ...............................14

CHAPTER 3: METHODOLOGY ............................................................................19
3.1

Analytical framework ..................................................................................19

3.2

Model ...........................................................................................................20

3.3

Data ..............................................................................................................24

3.4

Variables ......................................................................................................24

CHAPTER 4: RESULTS ..........................................................................................27


4.1.

Vietnam Health Care System ..........................................................................27

4.2.

Delivery of Health care ...................................................................................28

4.3.

Financing of Health Care ................................................................................29

4.4.

Results .............................................................................................................32
4.4.1.

OLS and Quantile Regression of Household Total expenditure ..........32

4.4.2.

Average Per household Health Finance, Shares of Total Financing ....35

4.4.3.

Distributional Incidence of Sources of Household Health Finance .....39

4.4.4.

Decomposition inequality of Household Total expenditure .................43

4.4.5.

Decomposition inequality of Health Care ............................................43

4.4.6.

Concentration Curves ...........................................................................47

4.4.7.

Distribution of Health Payments ..........................................................48

4.5.

Compare with international studies .............................................................49

4.6.

Discusion .....................................................................................................50

CHAPTER 5: CONCLUSION AND POLICY IMPLICATION .............................51
5.1.

Conclusion ...................................................................................................51

5.2.

Policy implication ........................................................................................52

5.3.

Limitation ....................................................................................................53

REFERENCE


LIST OF ABBREVIATIONS
ATP

Ability to pay

CI

Concentration index

GDP

Gross domestic product

GSO

General Statistics Office

K

Katwani index

MOH

Ministry of Health

OOP

Out-of-pocket (payment)

PHI

Private health insurance

SHI

Social health insurance

THE

Total health expenditure

VND

Vietnamese Dong (currency)

OLS

Ordinary least squares

VHLSS

Vietnam Household Living Standards Survey

WHO

World Health Organization

CONTENT OF TABLE
Table 1: Some brief definitions ..................................................................................5
Table 2: The magnitude of inequality based on the value of CIs ............................10
Table 3: Summary formulae analyzing inequity ......................................................20
Table 4: Variables of socioeconomic factors and expenditures...............................25
Table 5: Health Expenditure in Vietnam .................................................................31
Table 6: OLS and Quantile Regression of Household Total expenditure ..............33
Table 7: Average Per household Health Finance (‘000 VND) and Shares of Total
Financing (%) ............................................................................................................37
Table 8: Distributional Incidence of Sources of Household Health Finance in
Vietnam, 2012 and 2010 ...........................................................................................41
Table 9: Decomposition inequality of Household Total expenditure .....................46
Table 10: Decomposition inequality of Health Care ..............................................45
Table 11: Compared results with international studies ............................................49


CONTENT OF FIGURE
Figure 1: Social determinants of health and health equity ..........................................6
Figure2: Health inequality vs. health inequity ...........................................................7
Figure3: Process to analyze inequity ........................................................................8
Figure4: Three dimensions of health coverage ........................................................8
Figure5: Lorenz curve for prepayment income and concentration curve for health
care payment .............................................................................................................11
Figure6: Framework of analysing inequity ...............................................................19
Figure7: The structure of health care system in Vietnam .........................................28
Figure8: Channels of financing sources for Viet Nam health care system ...............30
Figure9: Social Insurance Contribution, Inpatient and Outpatient payments, Out-ofpocket for health care ................................................................................................47
Figure10: Health Payment Shares by Quintiles ........................................................49

1

CHAPTER 1: INTRODUCTION
1.1.

Background

Equity is one of the most important problems on the world, especially in health
care finance. Many countries are working to establish a health financing system that
allows them promote, prevent, curate and rehabilitate health interventions for all at
an affordable cost – thereby achieving equity in access and financial riskprotection
as well as in health financing (WHO, 2005). Moreover, this is particularly
challenging for low- and middle-income countries in light of their heavy reliance on
out-of-pocket (OOP) payments for health care (WHO, 2010). Viet Nam is a
developing country, withoutthe exception. The challenge is to improve the health
financing system in order to achieve universal coverage asan overall policy goal.
Equitable financing is a key objective of health care systems. Its importance is
evidenced in policy documents, policy statements, the work of health economists
and policy analysts. The financing of health care is a subject of major concern
throughout the world. The conventional categorisations of finance source for health
care are taxation, social health insurance, and out-of-pocket payments. An
understanding of the equity implications would help policy makers in achieving
equitable financing.
The main purpose of this research was to comprehensively assess the equity of
health care financing in Vietnam, which represents a new country context for the
quantitative techniques used. In this research, author uses the concentration index to
assess inequality and Katwani index to assess the inequity of health care finance.
The study evaluated each of the four financing sources (outpatient and inpatient
expenditures, health insurance,out-of-pocket payments) independently, and

subsequently by combined the financing sources to evaluate the whole financing
system. The author also assesses inequality of expenditure only in health care and
total expenditure including food and non-food expenditures of households.
Moreover, the author also uses additional methodology to assess that which sources


2

mostly affect inequity of health care finance by applying the method decomposition
of expenditure
Definition of Equity involves a value judgment of fairness on the variations
from the equality in the population. Equity in health care financing is assessed by
the degree of inequality in paying for health care between households of unequal
Ability To Pay (ATP) (Doorslaer, Wagstaff, 1993), ATP is the factor used to
evaluate inequity of health care finance system– ATP can be measured by the total
expenditure of household, including food, non-food payments and healthcare
expenses.
To strengthen the important of health care finance related to ATP, many studies
have used ATP to evaluate the inequity in health care field such as ATP in Denmark
and the UK; Ireland, Portugal and Spain; Italy and the Netherlands; and tax
financing in Switzerland. Furthermore, the accordance of health payments to ATP is
regarded as an important objective in the finance of health care in Belgium, France,
Germany, the Netherlands. Policy makers in various countries are seen to commit
towards financing health care according to ATP.
Kakwani
Wagstaffand

(1997),
Doorslaer

Doorslaer

(1997,2000),Doorslaer

(1993,

1997),Wagstaff(2002)have

andMasseria(2004),
studied

income-

relatedinequalityinhealthcareutilization, equity in health care delivery, equity in
health care finance, and inequalities in health by using ATP.
The Ministry of Health (MOH) in Vietnam also agree to use the new national
health financing scheme be related to ATP (PAHE, 2011).
With all reasons above, the author also uses ATP tomeasureandexplaininequality
and inequity in health care finance in Vietnam.
In summary, this study usetheconcentrationindex and Kakwani indexforthe
measurement

of

ATPinequality

and

inequity

in

health

care

finance

proposedbyWagstaffandDoorslaer (2000) to assess whether there are inequity and
inequality in health care system andwhichfactors affect mostly to the inequity in
health care finance system in Vietnam.


3

1.2 Research Objectives
This study presents an inequity assessment of the health financing system, and
draws together all finance sources in Vietnam to evaluate the whole financing
system. The general objective is to analyzethe inequity of health care finance with
quintile of ability-to-pay of Vietnam households. Specific objectives are:
1. To calculate the inequality indices (CIs) and the inequity indices (Katwani
indices)of healthcare finance variables of households such astotal expenditure,
health payments, out-of-pocket for health, food or non-food payments.
2. To decompose the inequality of households’ totalexpenditure and total health
expenditure.
3. To calculate the factors affect to total expenditure or ATP through both OLS and
Quantile regression models.
1.3 Data source
This study uses the datasets of Vietnam Living Standards Survey 2012 and 2010
(VHLSS 2012, 2010) with households as observations.

1.4 Study Design
Chapter

1

focusesonthebackgroundand

preciselystatestheproblemsthathavetobeaddressbythisresearch. It also establishes the
significance of thisresearch.
Chapter 2presents general definition of inequality and inequity in health, health
finance variables, and methods measure inequity indices.
Chapter 3 briefly reviews the relevant literatures and outlines the detailed
method used for this study.
Chapter 4 calculates inequity indices and decomposes the health care finance
variables.
Finally, Chapter 5 briefly discusses the conclusions, policy implications and
limitation of this study.


4

CHAPTER 2: LITERATURE REVIEW
2.1.

Definition

2.1.1. Social equity
Today, there are many definitions about equity of different schools, here are
some perspectives:
 Libertarians emphasize a respect for natural rights, focusing in particular on two

of the rights: rights to life and to possessions.
 Utilitarians aim at maximizing the sum of individual utilities or welfare, though
some utilitarian writers have incorporated a concern for individual autonomy
into this maximand.
 Rawlsians (1971) proposes two principles of social justice, namely that
individuals should havethe maximal liberty compatible with the same degree of
liberty for everyone and that deliberate inequalities are unjust unless they work
to the advantage of the least well off.
 Marxists emphasize “needs”, principle of “distribution according to need”. And
this principle is can be interpreted as “from each according to his ability to pay”.
Health equity also has many perspectives of many different reseachers and
institutions on the world, specific described at Table 1:


5

Table 1: Some brief definitions
No
Author
.

Definitions

1

Mooney 1983 (and
others

Horizontal equity requires equal treatment for
equal need.

Vertical equity: different treatment for different
need.

2

Aday 1984

Health care is equitable when resource allocation
and access are determined by health needs

3

Whitehead 1990, 1992

Health inequities are differences in health that are
avoidable, unjust and unfair

4

Culyer &Wagstaff
1993

Equity in health care means equal utilization,
distribution according to need, equal access and
equal health outcomes

International Society
for Equity in Health
(ISEqH), 2005

Health equity is the absence of systematic and
potentially remediable differences in one or more
aspects of health across populations or population
subgroups defined socially, economically,
demographically or geographically

5

“Health Equity is the absence of potentially
avoidable differences in health (or health risks that
6
WHO
policy can influence) between groups of people
who aremore and less advantaged socially”
Source: Braveman, 2006, forthcoming PAHE 2013
2.1.2. Equity in health care
Hurst (1985) studies of inequity in health care finance have tended to take as
their starting point the premise that health care ought to be financed according to
ability to pay
The egalitarians who are concerned to ensure that health care is financed
according to ability to pay and that the delivery of health care is organized in such a
way that everyone enjoys the same access to care and that the care is allocated on
the basis of need with a view to promoting equality of health.
The general picture of health care finance which was affected by many
determinants such as individual lifestype factors, social and community networks,


6

and general socio-economic, cultural and environmental conditions. The detailed

was described by WHO in Figure 1 as below.
Figure 1: Social determinants of health and health equity

2.1.3. Inequality and Inequity
Theterminequalityinhealthisdifferentthantheterminequityinhealth.
Actually, inequalities in health are based upon observed differences on disparities
on health.Health inequalies are differences in health outcomes and their
determinants between segments of the population, as defined by social,
demographic, environmental, and geographic attributes.
On the other hand, inequities in health are based on ethical judgments about the
fairness of the differences.Health inequity refers to those inequalities in health that
are deemed to be unfair or stemming from some form of injusticeor“the absence of
potentially avoidabledifferences in health between groups of people who are more
and less advantaged socially” (PAHE, 2013)


7

An example of health inequality is the higher incidence of illness among the
elder

people

as

compared

withyoung

people.

Thisisanunavoidablephenomenon(dueto
biologicalorigin)anddoesnotimplyamoraljudgment.However,ifthereexistsahigher
incidence of illness among the poor elderly as compared with that amongthenonpoor elderly, thenthisreferstoasavoidableinequalityorinequity(determinedbysocioeconomicfactors, etc). The distinction between health inequality and health inequity
is illustrated in Figure 2.
Figure 2: Health inequality vs. health inequity

Source: PAHE, 2013

The general techniques to calculate and evaluate the health care inequity
must follow in many differently research fields, described in the standardized model
as Figure 3 (PAHE, 2013). However, the author wants to emphasize only the
inequity in health care finance, so the detailed research is more mostly concentrated
than in inequity in household payment for health care services


8

Figure 3: Process to analyze inequity

Source: PAHE, 2013

The purpose of decreasing inequity in health care finance is to reduce the gap
between the public expenditures and personal expenditures for health care. To carry
on this aim we must manage and control three perspectives like Figure 4

Figure 4: Three dimensions of health coverage

Source: PAHE, 2013

9

2.1.4. Vertical equity and Horizontal equity
Vertical equity: persons or families of unequal ability to pay making
appropriately dissimilar payments for health care, and
Horizontal equity: persons or families of the same ability to pay making the
same contribution. Horizontal equity also can be defined in terms of the extent to
which those of equal ability to pay actually end up making equal payments,
regardless of, for example, gender, marital status, trade union membership, place of
residence, etc.
In this study, the author analyzes inequality and inequity in health care finance
mostly based on vertical equity perspective.
2.1.5. Ability to pay – ATP
In a developing-country context, like Viet Nam, given the lack of organized
labor markets and the high variability of incomes over time, household consumption
(or at least expenditure) is generally considered to be a better measure of welfare
and ability to pay than income. With the objective of this thesis is simply to assess
the degree of proportionality between health payments and some measure of living
standards, then household expenditures gross can be used [20]. Therefore, in this
study ability to pay is typically total household consumption, including all payments
toward health care.
2.2.

Concentration index and Concentration curve

2.3 1. Concentration index
Wagstaff (1991) published a paper on the measurement of inequalities in health.
Theprimaryobjectivesofthispaperwere:(1)toprovideacriticalreviewofthevarious
measures

of

inequality

in

(2)toidentifywhichmeasuresarebestsuitedtomeasurehealthinequality.This

health,
paper

identified the three measures of inequality, namely: (a) the range, (b) the Gini
coefficient (Lorenz curve), and (c) the concentration index (concentration curve)
Theconcentrationindex(CI)providesameasureofthemagnitudeofinequality.Itis
defined as twice the area between the concentration curve and the line of


10

equality(Figure

5).

The

index

has

amagnitudebetweenminusoneandplusone,andtakesthevalueofzerowhenthereisno
socioeconomicinequality.Theconventionisthattheindextakesanegativevaluewhenthe
concentrationcurveliesabovethelineofequalityandittakesapositivevaluewhenthe
concentration lies below the line of equality. The absolute value of CI measures the
magnitude of socio-economic inequality, the larger the absolute value of CI, the
greater the disparity.
Conventionally, a concentration index of less than 0.2 indicates a low magnitude
of

inequality.

A

concentrationindexofbetween0.2and0.39impliesamoderatemagnitudeofinequality.A
concentration index of between 0.4 and 0.6denotes a highmagnitude of inequality; it
marksthe threshold at which inequalityshould be treatedas a matter of urgency.A
concentration index of 0.6 or higher reflects a very high magnitude of inequality
(See Table 2) (forthcoming PAHE, 2013).
Table 2: The magnitude of inequality based on the value of CIs
Absolute value of concentration index
Interpretation
0
Perfect equality
< 0.2
Minor inequality
0.2 - 0.39
Moderate inequality
0.4 - 0.59
Severe inequality
> 0.6

Extreame inequality
Source: PAHE 2013
2.3 2. Concentration curve
The concentration curve plots the cumulative percentage of the health variable
(y-axis) against the cumulative percentage of the population, ranked by living
standards, beginning with the poorest, and ending with the richest (x-axis). In other
words, it plots shares of the health variable against quantiles of the living standards
variable (Figure 5)
2.3.

Katwani indices and Concentration curves


11

Kakwani (1997)clarifiedtherelationshipbetweentwowidelyusedindicesof health
inequality namely: the relative index of inequality (RII) and the concentration index
(CI) and explained why these are superior to the other indices used in the literature.
For example, the
CIissensitivetosocioeconomicdimensionofinequalitiesinhealthbecauseitsvaluelies
between-1to1.ApositiveCIrepresentsthepro-richandanegativeCIrepresentspro-poor
inequality in health
Figure 5: Lorenz curve for prepayment income and concentration
curve for health care payment

Source: Handbook of Health Economics

Lpre (p) is the Lorenz curve for pre-payment income.
Lpay(p) is the payment concentration curve, which plots the cumulative proportion
of the population [ranked according to pre-payment income as with Lpre(p)] against

the cumulative proportion of health care payments.


12

The degree of progressivity can therefore be assessed by looking at the size of the
area between Lpre (p) and Lpay (p). If Gpre is the Gini coefficient for pre-payment
income, and Cpay is the concentration index for payments,
Kakwani's index of progressivity, K or πK, is defined as : πK = Cpay – Gpre

2.4.

Inequity or Progressivity of health care finance

Many questions must be answered when analyzing the inequity health care finance,
every problem contributes its role. Example,
 Who pays for health care?
 To what extent are payments toward health care related to ability to pay?
 Is the relationship proportional?
 Or is it progressive - do health care payments account for an increasing
proportion of ability to pay (ATP) as the latter rises?
 Or, is there a regressive relationship, in the sense that payments comprise a
decreasing share of ATP?
Which standards used to calculate and analyze for answering these questions, here
are some suggestions
The Kakwani index (Kakwani, 1977) is the most widely used summary measure
of progressivity in both the tax and the health finance literatures (O’Donnell,
Wagstaff, 1992; Wagstaff, 1999). It is twice the area between a payment
concentration curve and the Lorenz curve and is calculated as πK= Cpay – Gpre,
where Cpay is the concentration index for health payments and Gpreis the Gini

coefficient of the ATP variable. The value of πK ranges from –2 to 1.
 A negative number indicates regressivity; Lpay(p)lies inside Lpre (p).
 A positive number indicates progressivity; Lpay(p) lies outside Lpre (p).
In the case of proportionality, the concentration lies on top of the Lorenz curve and
the index is zero. But note that the index could also be zero if the curves were to
cross and positive and negative differences between them cancel.


13

Given this, it is important to use the Kakwani index, or any summary measure of
progressivity, as a supplement to, and not a replacement of, the more general
graphical analysis.

2.5.

Decomposition

The concentration index can be expressed as the sum of all contributions of
determinants. It tells us which factors contribute most to the observed inequality in
a given health outcome.In caseswheneconomicinequalityinthevariableofinterests
(healthcarepayments)

wasdetectedfrompreviousanalyses,

regressionmodelingswerethenconductedtoprovideparametersfordecomposingthe
contributions of different determinants to the observed socio-economic inequity in
the variable of interest.
The rule of thumb was to consider only the concentration index for economic
inequality of equal or greater than 0.2 (Moderate, severe or extreme inequality)for

decomposition analysis.
Wagstaff, Doorslaer, and Watanabe (2003) demonstrate that the health
concentration index can be decomposed into the contributions of individual factors
to income-related health inequality, in which each contribution is the product of the
sensitivity of heath with respect to that factor and the degree of income-related
inequality in that factor. For any linear additive regression model of health (y), such
as
𝑦𝑦𝑘𝑘 = 𝛼𝛼 + ∑ 𝛽𝛽𝑘𝑘 𝑥𝑥𝑘𝑘 + 𝜀𝜀𝑘𝑘

(a)

the concentration index for y, C, can be written as follows:
𝐶𝐶 = ∑

𝛽𝛽𝑘𝑘 𝑥𝑥̅𝑘𝑘
𝜇𝜇

𝐶𝐶𝑘𝑘 +

𝐺𝐺𝐶𝐶𝜀𝜀
𝜇𝜇

(b)

where µ is the mean of y, 𝑥𝑥̅𝑘𝑘 is the mean of xk, Ck is the concentration index for xk

and GCε is the generalized concentration index for the error term (ε). Equation

(b)shows that C is equal to a weighted sum of the concentration indices of the k

14

regressors, where the weight for xk is the elasticity of y with respect to xk ( 𝜖𝜖𝑘𝑘 =

𝛽𝛽𝑘𝑘

𝑥𝑥̅𝑘𝑘
𝜇𝜇

). The residual component - captured by the last term-reflects the income-

related inequality in health that is not explained by systematic variation in the
regressors by income, which should approach zero for a well-specified model.
The main aim of this methodis to unravel the causes of health sector inequalities,
and their change over time. Inequalities are caused by inequalities in the
determinants of the variable of interest, and the decomposition in Equation (b)

allows one to assess the relative importance of these different inequalities in
generating inequalities in the variable of interest
2.6.

Review emperical studies about health equity finance

O’Donnell, Doorslaer, Wagstaff, Lindelow (2005) wrote a handbook Analyzing
Health Equity Using Household Survey Data, to provide researchers and analysts
with a step-by-step practical guide to the measurement of a variety of aspects of
health equity. And, stimulate yet more analysis in the field of health equity,
especially in developing countries. Lead to a more comprehensive monitoring of
trends in the health fair, a better understanding of the causes of these inequalities,

more extensive evaluation of the impact of development programs on equity
medical part, and the policies and programs more effective to reduce inequalities in
the health sector. In their book, they use many methods to evaluate the inequity, but
in summary they use two indices: Concentration index and Kakwani index to
evaluate.
To understanding the definition of equity, Culyer and Wagstaff (1993) have
published

thearticle

researched

the

equity

in

USA.

Oneof

objectivesistoclarifythemeaningofthetwodefinitionsofequitywhichseemleastclear:
“distributionaccordingto

need”

and

“equalityof

access”.

Authors

concludethatthe
principlesof“distributionaccordingtoneed”and“equalityofaccess”have

also


15

been,andcontinuetobe,interpretedinanumberofdifferentways,andthatthevariousinterp
retationsaremutuallyincompatible.
To compare the inequity in a developed and a developing country, Wagstaff and
Doorslaer (1994) useddatasets VHLSS 1998 (Viet Nam) and NPHS 1994
(Canada)in the paper which outlines a framework for comparing empirically overall
health inequality and socioeconomic health inequality. The framework, which is
developed for both individual-level data and grouped data, is illustrated using data
on malnutrition amongst Vietnamese children and on health utility amongst
Canadian adults. In both cases, socioeconomic inequalities account for around 25%
of overall inequality.
To examine which indices used in analyzing inequity, Kakwani, Wagstaff,
Doorslaer (1997) used the dataset of Dutch HIS 1980/81 which clarifies the
relationship between two widely used indices of health inequality and explains why
these are superior to other indices used in the literature. It also develops asymptotic
estimators for their variances and clarifies the role that demographic standardization
plays in the analysis of socioeconomic inequalities in health.
To present evidenceonincome-relatedinequalitiesinself-assessedhealthin nine

industrialized countries, Doorslaer,Wagstaff and partners (1997) used the datasets
of Sweden, Switzerland, UK,US, Germany among1980s-1990s in their study.Health
interview survey data were used to construct concentration curves ofselfassessedhealth,measuredasalatentvariable.Inequalitiesinhealth
favoredthehigherincomegroupsandwerestatisticallysignificantinallcountries.
Inequalities were particularly high intheUnited StatesandtheUnitedKingdom.
Amongst

otherEuropeans,Sweden,FinlandandtheformerEastGermanyhadthelowest

inequality.Across

countries,

a

strongassociation

betweeninequalitiesinhealth andinequalitiesinincome.

was

found


16

To answer the question How is the inequity in Asia? O’Donnell, Doorslaer and
partners (2005) studied the inequalities which described the structure and the
distribution of health care financing in 13 territories that account for 55% of the
Asian population. Survey data on household payments are combined with Health

Accounts data on aggregate expenditures by source to estimate distributions of total
health financing. In all territories, high-income households contribute more than
low-income households to the financing of health care. In general, the better off
contribute more as a proportion of ability to pay in low and lower-middle income
territories. The distribution of out-of-pocket (OOP) payments also depends on the
level of development. In high-income economies with widespread insurance
coverage, OOP payments absorb a larger fraction of the resources of low-income
households. In poor economies, it is the better off that spend relatively more OOP.
This contradicts much of the literature and suggests the poor simply cannot afford
to pay for health care in low-income economies. Among the high-income territories,
Hong Kong is the one example of progressive financing arising from reliance on
taxation, as opposed to social insurance, and an ability to shield those on lowincomes from OOP payments. Thailand has a similar financing structure and
achieves a similar distributional outcome.
To check which factors mostly affected to health care inequity, many writers
used decomposition method for their researches, I remind that only factors that CIs
are equal and greater than 0.2, mean that moderate and severe inquality, then for
decomposition analysis. Below are some studies on the world.
Wagstaff, Doorslaer, Watanabe (2003) researched the decomposingthe causes of
health sector inequalities with an application to malnutrition inequalities in Vietnam,
they used VHLSS 1993 and 1998 for their study. Inequalities across the income
distribution in a variable y can be decomposed into their causes, and changes in
inequality in y can be decomposed into the effects of changes in the means and
inequalities in the determinants of y, and changes in the effects of the determinants


17

of y. Inequalities in height-for-age in Vietnam in 1993 and 1998 are largely
accounted for by inequalities in consumption and in unobserved commune-level
influences. Rising inequalities are largely accounted for by increases in average

consumption and its protective effect, and rising inequality and general
improvements at the commune level.
To compare inequality decomposition from Vietnam and other countries,
Wagstaff (2005) also researchedinequality decomposition and geographic targeting
with applications to China and Vietnam.Inthis research they used dataset VHLSS
1998. The study answer the question How far are income-related inequalities in the
health sector due to gaps between poor and less poor areas, rather than due to
differences between poor and less poor people within areas? This note sets out a
method for answering this question, and illustrates it with two empirical examples.
The disproportionate accrual of health subsidies to Vietnam’s better-off is found to
be largely due to the fact that richer provinces have larger per capita subsidies,
while pro-rich inequalities in health insurance coverage in rural China are found to
be largely due to the fact that better-off villages have been more successful at
preventing the collapse of their insurance schemes.
As a similar research in Asian country, Chai Ping Yu, Whynes,Sach (2008) have
studied health care finance in Malaysia, they used datasets HE 92/93 for this
study.The primary purpose of this paper was to comprehensively assess the equity
of healthcare financing in Malaysia, which represents a new country context for the
quantitative techniques used. The paper evaluated each of the five financing sources
(direct taxes, indirect taxes, contributions to Employee Provident Fund and Social
Security

Organization,

private

insurance

and

out-of-pocket

payments)

independently, and subsequently by combined the financing sources to evaluate the
whole financing system. Results showed that Malaysia's predominantly taxfinanced system was slightly progressive with a Kakwani's progressivity index of
0.186.