Equity in Health Care Financing Among Iranian Households

Abstract

Background: One of the main challenges of all health systems is achieving equity in healthcare financing. The Kakwani index is an equity index used to show how distant a financing source is from the proportional status. Objectives: The present study aimed to measure the equity of Iran’s health system financing in rural and urban areas between 2001 and 2010 using the Kakwani index. Materials and Methods: This study analyzed secondary data for the years 2001 through 2010 in Iran. The data of annual household expenditures and an income survey conducted by the statistical center of Iran (SCI) were used in this study. In addition, out of pocket payments and health insurance premiums, as two sources of healthcare financing, were investigated regarding vertical equity. The T-test was used to test the dominance of the curves. Results: The Kakwani index was negative (regressive) for out of pocket payments among both rural and urban households (-0.168 in 2001 to -0.197 to 2010, and 0.104 in 2001 to 0.156 in 2010, respectively), it but did not follow a regular trend during the study period. On the other hand, the Kakwani index was positive (progressive) for health insurance premium payments in rural areas (0.065 in 2001 to 0.095 in 2010). In urban areas, this index was negative for health insurance between 2001 and 2006 (-0.04 and -0.004), respectively), but positive between 2007 and 2010 (0.003 and 0.016, respectively). The dominance test (T-test) showed the concentration curves of out of pocket payments in both areas dominated the Lorenz curve in all years, but the dominance test (T-test) for health insurance premium payments did not follow a regular trend during the study period. Conclusions: Due to the negativity of the Kakwani index for out-of-pocket payments, a great burden on the households can be predicted, and the progressivity of health insurance premium payments implies that expanding insurance coverage may lead to more equitable financing. Thus, the government should take the responsibility to expand the service and cost coverage of insurance plans and to develop policies that protect poor people.