Assessing progressivity and catastrophic effect of out-of-pocket payments for healthcare in Canada: 2010-2015

Abstract

This study uses Statistics Canada’s Survey of Household Spending (SHS) to examine progressivity and catastrophic effect of OOP healthcare expenditures (OOPHE) in Canada from 2010 to 2015 inclusive. The Kakwani Progressivity Index (KPI) was used to measure the progressivity of OOPHE for this period. The catastrophic effect of OOPHE was calculated using a threshold 10% of total household consumption. The KPI indicated that OOPHE are a regressive source of Canadian healthcare financing, with regressivity increasing over the study period. This indicates that the distribution of OOPHE in Canada is inequitable, as households with higher consumption pay proportionately less than households with lower consumption. Furthermore, the results suggested that 5-7% of Canadian households face catastrophic OOPHE, and rural households had a higher proportion of catastrophic OOPHE than urban households. Policies to enhance financial risk protection among low-income and rural households are required to improve equity in healthcare financing in Canada.