Who pays? Out-of-Pocket Health Spending and Equity Implications in the Middle East and North Africa

Abstract

Ensuring affordable, effective health care and financial protection against the adverse effects of household out-of-pocket (OOP) health expenditures represents an important policy objective in most countries, yet relatively little evidence exists regarding patterns and implications of household health expenditures in the Middle East and North Africa (MENA) region. This paper examines the scope of out-of-pocket expenditures and their implications on living standards and policy reforms in six MENA countries including Yemen, the West Bank and Gaza, Egypt, Iran, Tunisia, and Lebanon. Results show that OOP payments represent a relatively high share of total national health care financing at 49 percent on average in the MENA region as of 2006. Households pay an average of 6 percent of their total household expenditure on health. Most of this OOP is spent on medications, doctor visits and diagnostic services. Lower-income and rural households generally face greater financial risk; yet this is reversed where private health services are utilized and paid for more frequently by higher-income groups. 7 to 13 percent of households face particularly high OOP payments, or catastrophic expenditures equal to at least 10 percent of household spending. Poverty rates tend to increase by up to 20 percent after health care spending is accounted for. Results are discussed in light of ongoing policy efforts to strengthen social protection for health care.