Proportion of the population pushed below a relative poverty line by household health expenditures corresponds to the change in the poverty headcount ratio due to household expenditure on health being included or excluded from the measure of household welfare, which can be either consumption or income. The relative poverty line is defined as 60% of median daily per capita consumption or income in each country which comes closest to the relative poverty line used by Eurostat to monitor poverty in the European Union. Household consumption or income, household expenditures on health, and the relative poverty line are all measured by their daily value per capita.
Associated terms:
Out-of-pocket expenditure
Financial protection in health
Impoverishing health spending expenditures
Disaggregation:
National
M&E Framework:
Impact
Method of estimation:
The proportion of the population pushed below a poverty line by household health expenditures (with impoverishing health expenditures) is computed as the difference in the incidence of poverty based on household’s total consumption expenditure or income gross and net of health expenditures. Household consumption or income, household expenditures on health, and poverty lines are all measured by their daily value per capita. Household expenditure on health are defined as formal and informal payments made at the time of getting any type of care (preventive, curative, rehabilitative, palliative or long-term care) provided by any type of provider. These payments include the part not covered by a third party such as the government, health insurance fund or private insurance but exclude insurance premiums as well as any reimbursement by a third party. They might be financed by income, including remittance, savings or borrowings. With this definition health expenditures are labelled Out-Of-Pocket (OOP) payments in the classification of health care financing schemes (HF) of the international Classification for Health Accounts (ICHA). Household’s sample weight multiplied by the household size is used to obtain representative numbers per person. If the sample is self-weighting, then only the household size is used as the weight. Indicators of impoverishing spending on health are not part of the official SDG indicator of universal health coverage per se but relate UHC to the first SDG goal, namely end poverty in all its forms everywhere. The idea is that out-of-pocket payments divert household spending away from non-medical budget items such as food and shelter to such an extent that in some cases a household’s position in relation to such a pre-defined poverty line before and after spending out-of-pocket on health changes. It is not possible to eliminate impoverishment due to out-of-pocket health spending using a relative poverty line, but it is possible to reduce it. To this end, out-of-pocket health expenditures should not be a major driver of economic disadvantage relative to others in the society. Ultimately the choice of the poverty line should be tailored to inform evidence-based policy changes at global, regional and national levels. The use of national and regional poverty lines is critical to fully understand the impact of out-of-pocket payments on poverty at national and regional levels.
Method of estimation of global and regional aggregates:
The global and regional incidence of the proportion of the population pushed below the relative poverty line 60% of median daily per capita consumption or income by household health expenditures is estimated as the population weighted average of the country level share of people with such impoverishing health expenditures at the 60% of median daily per capita consumption or income relative poverty line for a reference year. Incidence at the country level for the reference year is estimated using different methods depending upon the availability of information for that country around or at the reference year (T*). • In countries for which there is an observed incidence rate of impoverishing health expenditures at the 60% of median daily per capita consumption or income relative poverty line in the reference year T*, this point is used. • When there are at least two observed incidence rates of the population with impoverishing health expenditures at the 60% of median daily per capita consumption or income relative poverty line around the reference over a 5 year window around the reference year [T*–5; T*+5], linear interpolation is used to project the value of the proportion of “the population pushed below the 60% of median daily per capita consumption or income relative a day poverty line by household health expenditures” in the reference year. • If only one observed incidence rate of the population with impoverishing health expenditures at the 60% of median daily per capita consumption or income relative poverty line is available either before or after the reference year and within a five year window before or after the reference year (T*+ or T*-5), a multilevel model of the rate of impoverishing health expenditures at the 60% of median daily per capita consumption or income relative poverty line is estimated using the aggregate share of OOP over total consumption expenditure and household final consumption as explanatory variables. • For countries with no observed incidence rate over a 10-year window around the reference year, the multilevel model is used to project the survey point to the reference year using the share of aggregate OOP over total consumption and household final consumption if that information is available. If such information is not available, the regional median value of the proportion of the population with impoverishing health expenditures at the 60% of median daily per capita consumption or income relative poverty line is used instead to impute the incidence rate for those countries in the reference year. The country estimates for the reference year are then aggregated up to the regional and global levels to get the number of people pushed below the 60% of median daily per capita consumption or income relative poverty line by household health expenditures. Global and regional aggregates are expressed in million or percent of the relevant population. Global and regional rates are calculated by expressing these numbers as a share of the relevant population, equivalent to taking a population-weighted average of the relevant country rates.
Other possible data sources:
Health surveys with a module on household expenditures
Preferred data sources:
Household budget surveys
Household income and expenditure surveys
Household socioeconomic and living standards surveys
Expected frequency of data dissemination:
Every 2-3 years
Expected frequency of data collection:
Every 1–5 years depending on implementation of population-based household expenditure surveys led by national statistics offices
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