ABSTRACT: BACKGROUND: At the beginning of 2007, health care reforms were implemented
in Hungary in order to decrease public expenditure on health care. Reforms involved
the increase of co-payments for pharmaceuticals and the introduction of co-payments
for health care services. OBJECTIVE: The objective of this paper is to examine the
progressivity of household expenditure on health care during the reform period, separately
for expenditures on pharmaceuticals and medical devices, as well as for formal and
informal patient payments for health care services. METHODS: We use data on household
expenditure from the Household Budget Survey carried out by the Central Statistical
Office of Hungary. We present household expenditure as a percentage of household income
across different income quintiles and calculate Kakwani indexes as a measure of progressivity
for a four years period (2005-2008): before, during and after the implementation of
the health care reforms. RESULTS: We find that out-of-pocket payments on health care
are highly regressive in Hungary with a Kakwani index of -0.22. In particular, households
from the lowest income quintile spend an about three times larger share of their income
on out-of-pocket payments (6-7 %) compared to households in the highest income quintile
(2 %). Expenditures on pharmaceuticals and medical devices are the most regressive
types of expenditure (Kakwani index -0.23/-0.24), and at the same time they represent
a major part of the total household expenditure on health care (78-85 %). Informal
payments are also regressive while expenditures on formal payments for services are
the most proportional to income. We find that expenditures on formal payments became
regressive after the introduction of user fees (Kakwani index -0.1). At the same time,
we observe that expenditures on informal payments became less regressive during the
reform period (Kakwani index increases from -0.20/-0.18 to -0.12.) CONCLUSIONS: More
attention should be paid on the protection of low-income social groups when increasing
or introducing co-payments especially for pharmaceuticals but also for services. Also,
it is important to eliminate the practice of informal payments in order to improve
equity in health care financing.
