1. World Health Organization
26 February 2019
Financial protection in the South East Asia region: determinants and policy implications
Hui Wang and Lluis Vinyals, WHO SEARO, 11 December 2017

3. This presentation will discuss
The financial protection situation in SEAR at a glance
The determinants of out-of-pocket spending
What is being done to tackle the main issue: Medicines
Elements to consider when dealing with the financial protection challenge

4. Context (averages): high OOP, low public spending
Out of pocket and General Government Health Expenditure, as share to Total Health Expenditure, 2014
SEAR has the highest OOP share of total health expenditure amongst WHO regions
Government spending is amongst the lowest

5. Financial protection is measured in two ways:
Catastrophic health expenditure
Proportion of the population with large household expenditures on health as a share of total household expenditure or income
Impoverishment due to health
Proportion of population that falls below the poverty line (increased incidence) due to health related spending
What is missing?
Further impoverishment: People (poor citizens) already poor cannot be “impoverished”
Foregone care: People (poor citizens) not using services are not captured in the picture because they spend “nothing”

6. Financial protection: Catastrophic health expenditures
Incidence of catastrophic health expenditure in six SEAR countries
Country
Year
Threshold of HH expenditure = 10%
Threshold of HH expenditure =25%
Bhutan
2012
4.00
1.39
India
2011
17.33
3.89
Nepal
10.71
2.41
Sri Lanka
5.33
0.91
Thailand
2015
2.01
0.38
Timor-Leste
2014
3.52
0.96

7. % pop being pushed under
Impoverishment due to health: approximately 57 million people are being impoverished in the 6 countries
% pop being pushed under
$1.90
$3.10
Bhutan
0.32
0.93
India
4.21
4.56
Nepal
1.67
3.44
Sri Lanka
0.07
0.83
Thailand
0.003
Timor-Leste
1.12
0.84

8. Impoverishment: equity perspective
Percentage of population being pushed under international poverty line due to OOP (2011 PPP international dollar*), by expenditure/consumption quintile
Panel A. PL=$1.90
Poorest
Poorer
Middle
Richer
Richest
Bhutan
1.31
0.28
India
17.61
2.49
0.67
0.25
Nepal
6.90
0.97
0.46
Sri Lanka
0.34
Timor-Leste
5.28
0.22
0.10
0 values amongst the poorest reflect that further impoverishment is not captured here
In countries relying on OOP, even the richest can fall into poverty
Rural population suffer more except in Timor-Leste
Percentage of population being pushed under the international poverty line due to OOP (2011 PPP international dollar), by rural/urban
Panel A. PL=$1.90
Rural
Urban
Bhutan
0.43
0.06
India
5.24
1.61
Nepal
1.98
0.94
Sri Lanka
0.08
Timor-Leste
0.95
1.56

9. Components of OOP expenditure: Medicines driving financial hardship
Share of medicines in out-of-pocket health expenditure in six SEAR countries
In four countries, medicines spending drives OOP
Sri Lanka OOP is led by payments to outpatient private facilities. Thailand led by inpatient care
(ATTENTION: this is in relative terms)
National
Poorest
Poorer
Middle
Richer
Richest
Rural
Urban
Bhutan
76.4
69.2
72.4
77.0
80.8
78.2
69.3
89.4
India
79.9
85.3
81.2
78.5
74.7
72.0
81.5
76.0
Nepal
77.1
85.1
79.3
78.1
71.4
77.3
Sri Lanka
33.6
35.5
31.6
34.7
33.1
32.1
40.7
Thailand
37.2
52.7
43.4
42.5
37.9
32.6
36.9
37.4
Timor- Leste
70.0
66.7
68.8
72.7
70.3
69.6

10. Existing policies to increase access to medicines seems not working: why?
Supply-side policies: free access to a list of essential medicines, usually supplied by public distribution channels (in most countries)
Achilles heel: effective use of public facilities and reliability of the procurement and distribution system
Demand-side policies: reimbursing patients or facilities for medicines dispensed to users (in few countries)
Pre-conditions of success: contracting and reimbursing scheme in place. Inclusion of medicines
Market based solutions: regulating prices and markups, to make them affordable
Main issue is related to many people (poor) cannot afford them at any price
Important additional points:
Low levels of public spending in many countries
Health financing solutions may not be enough to manage over-consumption of medicines

11. Fighting financial protection will require more strategic purchasing: What does this mean?
Defining what to deliver/ purchase: to cover medicines? All? How?
Defining how to pay for services: extra money will not translate into financial protection if paying providers is not “managed”
Defining who should provide the services: are users using more private providers? Coverage might depend on engaging with them
Thailand includes medicines in the UC scheme, using tax based money, channeled through capitation to districts

12. Few final messages
Globally, the median incidence of CHE (25% threshold) is 1%
India and Nepal have higher incidence
Financial protection issues in the region mainly linked to medicines (India, Nepal, Bhutan and Timor Leste)
Policies in place fall short of intended goals
Low spending, narrow scope and passive purchasing
Epidemiological transition will require bolder actions, including tackling the medicines

13. Thank you for your attention
Hui WANG and Lluis VINYALS TORRES
Health Economics and Planning Unit
Department of Health Systems and Development
WHO/SEARO
and