Progressivity of out-of-pocket costs under Australia's universal health care system: A national linked data study. (January 2023)

• Record Type: Journal Article
• Authors: Law, Hsei Di; Marasinghe, Dinith; Butler, Danielle; Welsh, Jennifer; Lancsar, Emily; Banks, Emily; Biddle, Nicholas; Korda, Rosemary
• Is Part Of: Health policy. Volume 127(2023)
• Page Start: 44
• Page End: 50
• Publication Date: 2023-01
• Subjects: Equity -- Health financing -- Out-of-pocket cost -- Healthcare -- Medicines; Medical education -- Periodicals; Medical policy -- Periodicals; Delivery of Health Care -- Periodicals; Education, Medical -- Periodicals; Health Education -- Periodicals; Health Planning -- Periodicals; Public Policy -- Periodicals; Enseignement médical -- Périodiques; Politique sanitaire -- Périodiques; Medical education; Medical policy; Periodicals; Electronic journals; Electronic journals; 362.1
• DOI: 10.1016/j.healthpol.2022.10.010
• Languages: English
• ISSNs: 0168-8510

Abstract

Highlights: We examined progressivity of out-of-pocket costs for Medicare-subsidised healthcare in Australian households. Out-of-pocket costs for out-of-hospital services were mildly regressive. Out-of-pocket costs for prescription medicines were distinctly regressive. Abstract: Background: In line with affordability and equity principles, Medicare—Australia's universal health care program—has measures to contain out-of-pocket (OOP) costs, particularly for lower income households. This study examined the distribution of OOP costs for Medicare-subsidised out-of-hospital services and prescription medicines in Australian households, according to their ability to pay. Methods: OOP costs for out-of-hospital services and medicines in 2017-18 were estimated for each household, using 2016 Australian Census data linked to Medicare Benefits Schedule (MBS) and Pharmaceutical Benefit Scheme (PBS) claims. We derived household disposable income by combining income information from the Census linked to income tax and social security data. We quantified OOP costs as a proportion of equivalised household disposable income and calculated Kakwani progressivity indices (K). Results: Using data from 82% ( n = 6, 830, 365) of all Census private households, OOP costs as a percentage of equivalised household disposable income decreased from 1.16% in the poorest decile to 0.63% in the richest decile for MBS services, and from 1.35% to 0.35% for PBS medicines. The regressive trend was less pronounced for MBS services ( K = -0.06), with percentage OOP cost relatively stable between the 2nd and 9th income deciles; while percentage OOP cost decreased with increasing income for PBS medicines ( K = -0.24). Conclusion: OOP costs for out-of-hospital Medicare services were mildly regressive while those for prescription medicines were distinctly regressive. Actions to reduce inequity in OOP costs, particularly for medicines, should be considered.