Out-of-pocket expenditure (on healthcare) is higher in the developing world, leaving many people exposed to the high costs of healthcare.


“Lack of financial protection for the costs of health care means that approximately 100 million people are pushed below the poverty line each year by payments for health care,4 and many more will not seek care because they lack the necessary funds…On average, almost 50% of health care financing in low-income countries comes from out-of-pocket payments, as compared with 30% in middle-income countries and 14% in high-income countries. When payments from general government expenditures, social (public) health insurance, and prepaid private insurance are combined, only 38% of health care financing in low-income countries is combined in funding pools, which allow the risks of health care costs to be shared across population groups, as compared with approximately 60% in middle-income countries and 80% in high-income countries.

Thus, the key financing issue for low- and middle-income countries is how to provide increased financial protection for households. That part of the population in the formal sector of employment, in which payroll taxes can be levied, could be included in social insurance arrangements. It is also commonly accepted that the poorest people require complete subsidization for health care costs from general taxation, and those with low incomes need at least partial subsidization. The key question is whether the rest of the population — those who are outside the formal sector of the economy but who are not the very poorest — should be covered by funds raised through general taxation or encouraged to enroll in contributory insurance programs.”

Mills, Anne. Health-care systems in low- and middle-income countries. NEJM 370, p552-7. February 2014.

http://www.nejm.org/doi/full/10.1056/NEJMra1110897?query=health-policy-and-reform&

[Note:

The data on healthcare systems was taken from a WHO database which you can use yourself. http://apps.who.int/nha/database/Comparison_Report/Index/en ]

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