Eddy van Doorslaer Erasmus University Rotterdam Equity in Health Care Finance and Delivery in Europe: the ECuity Project European Health Forum, Gastein, 26 September 2002, Austria

Introduction n What is the ECuity Project? n What are its ambitions? n What sort of results has it achieved? n What impact has it had on: EU member state policiesEU member state policies EC PolicyEC Policy monitoring of health system performance by OECD, WHO, World Bankmonitoring of health system performance by OECD, WHO, World Bank

The ECuity Project... n is a (series of) EU-funded research projects n aimed at international comparison of equity in the finance and delivery of health care n includes most EU and 2 non-EU countries (US and Switzerland) n involves 13 teams of health economists, working along “concerted action” principles n new phase to be started in 2002, aimed at establishing causal links, using ECHP panel data n Website:

Background n eighties: concern about potential equity implications of increasing emphasis on cost containment n nineties: concern about health care reform trends towards privatization and (managed) competition, increased cost sharing, decentralization n Questions: Do some countries perform better than others in promoting or preserving the equity ‘performance’ of their systems? Is there a trade-off between equity and efficiency? Which policies work better? What can be learned from cross- country comparisons?

Objectives of the project n Develop methods to measure inequality and inequity: concentration indices -- examples n Develop methods to explain inequality and inequity: decomposition into sources – examples n Improve understanding of between-country and within- country differences n Derive policy implications based on evidence

What is equity? n European health care equity goals mostly egalitarian, but requiring equality of what? Health care utilization? Health? Access? Health care payments? n ECuity Project looks at equity in: 1.finance: do those with higher ability to pay, contribute more? 2.delivery: do those in equal need get treated equally, irrespective of income? 3.health: what contributes to lower income-related inequality?

Equity in health care financing n Is the distribution of health care payments in relation to income proportional, progressive or regressive? n The mix of possible sources of finance (taxes, social insurance, private insurance or direct payments) determines the redistributive effects n Progressivity of health care payments can be measured using a Kakwani index, which is: nPositive if progressive nZero if Proportional nNegative if regressive: -

Example: progressivity of health care finance in 13 countries regressive progressive proportional

Equity in health care utilisation: are those in equal need treated equally? n Can be assessed by comparing the actual distribution of health care use in relation to the expected distribution on the basis of need characteristics n Does not require equality of utilisation n Equitable if use and need distributions coincide n Degree of inequity can be measured by an index of (horizontal) inequity, which is negative if pro-poor and positive if pro-rich n Data taken from Eurostat’s European Community Household Panel, wave 3 (1996)

European Community Household Panel n Major source of comparable micro data on health and health care use in EU n 5 waves available: 1994, 1995, 1996, 1997, 1998 n 12 EU member countries (+ Austria in 95 and Finland in 96) n total sample size: adults (> 16 years), ranging from n=2000 (Luxembourg) to n= (Italy). n Income measured as disposable income per equivalent adult (modified OECD scale)

GP utilisation tends to be higher among the lower income groups...

After standardisation for need differences, inequality in GP utilisation is much lower

Examples: need-standardized distribution of doctor visits n First level bullets Second level bulletsSecond level bullets –Third level bullets

Inequity indices for distribution of specialist care utilisation in 13 EU countries, 1995 Pro-rich

Income-related inequity in health care use n Little evidence of inequitable distribution of GP services (some even pro-poor) n But strong evidence of pro-rich inequity in access to: Specialist services (all countries)Specialist services (all countries) Hospital services (most countries)Hospital services (most countries) Dental services (all countries)Dental services (all countries) n And more so in countries offering private options alongside public system (UK, Portugal, Spain, Ireland) n And in countries with wide regional disparities in availability of facilities (Italy, Spain, Greece)

Health inequality by income n Concern about equity in health care stems from concern about inequalities in health n Degree of inequality can be measured using concentration index of (self-reported) health n In all countries, good health is more prevalent among higher income groups n But Portugal and UK more unequal than Netherlands, Belgium, Germany n Health inequality closely associated with income inequality but more influenced by health policy than by income redistribution

Indices of inequality in (self-reported) health by income level for 13 EU countries, 1995

Correlation between income inequality and health inequality Low inequality High inequality

Impact of the project on: 1. Research methods? Concentration indices have become one of the major health inequality measures, like the Gini index for incomeConcentration indices have become one of the major health inequality measures, like the Gini index for income Decomposition methods prove tremendously useful in identifying sources of inequityDecomposition methods prove tremendously useful in identifying sources of inequity 2. Health system performance indicators? OECD’s Health project on Equity in accessOECD’s Health project on Equity in access WHO’s framework for health system performanceWHO’s framework for health system performance World Bank’s Health and Poverty Network country sheetsWorld Bank’s Health and Poverty Network country sheets

Impact of the project on: 1. EU policies? Included in indicators for social exclusion (cf Atkinson report)Included in indicators for social exclusion (cf Atkinson report) Recommended for National Action Plans on Social InclusionRecommended for National Action Plans on Social Inclusion Health Monitoring?Health Monitoring? 2. EU member state policies? Input through participants) in numerous health system reform plan preparations; e.g. in Netherlands, France, (CMU), Ireland, ItalyInput through participants) in numerous health system reform plan preparations; e.g. in Netherlands, France, (CMU), Ireland, Italy 3. Non-EU countries’ policies? E.g. Canada’s Royal Commission on the Future of the Canadian Health Care System, Swiss health reforms,E.g. Canada’s Royal Commission on the Future of the Canadian Health Care System, Swiss health reforms,

Main achievement? Contributed to understanding that: 1.In health and health care, not only the level but also the distribution matters 2.That degree of inequality can be measured and compared at system level 3.That different policy choices lead to different distributional outcomes