Rationale and definition:

A central component of universal health coverage (UHC) is financial affordability and transparency in billing of preventative and curative health services. It is critical that global efforts to eradicate extreme poverty and promote social inclusion are not undermined by impoverishing expenditure to use needed health services, and that the poorest people can afford critical care.¹ For this reason, a monitoring framework for the SDGs must include a Global Monitoring Indicator on financial protection for health care.

Yet, measuring financial affordability and protection for a broad range of health services is difficult. An indicator for financial affordability and protection requires accurate data from a number of sources, including public health financing rules and household surveys. Data availability should be good in countries implementing universal health care (UHC), but may be a challenge in other countries.

Below we describe the two best options for this indicator and outline major limitations. We believe that these limitations can be overcome, but for now we present a placeholder for this indicator. The WHO and the World Bank are jointly working to develop a more robust and sophisticated indicator on financial protection. The SDSN looks forward to working with them and other interested organizations to identify the appropriate indicator and to promote it as part of the indicator framework for the SDGs.

The two best available options for a Global Monitoring Indicator on financial protection are:

• The percentage of households experiencing catastrophic health expenditure (usually defined as a share of annual household income net of subsistence needs)
• The number of households falling below the poverty line or being pushed deeper into poverty due to out-of-pocket spending on health care

These indicators can also be framed in reverse, e.g. the share of the population that does not experience catastrophic health expenditure.

A recent report by the WHO and the World Bank recommends these two indicators,² and data availability has improved in recent years so that either indicator can be computed for a large number of countries. However, these indicators do not adequately measure the common and often deadly condition of an already impoverished household that simply cannot access health services because of cost.³ These indicators are therefore likely vulnerable to under-counting. Moreover, the indicators do not provide a clear indication of the impact that out-of-pocket health expenditure might have on the overall social and economic situation of households.

It is also possible to evaluate the financial protection of health care systems in more synthetic ways, based on the rules of public financing for outpatient services, inpatient care, laboratory services, and medicines. Systems with full public financing will score high; those with heavy co-payments or out-of- pocket payments will score low. These synthetic calculations can be made annually based on health care rules and can be cross-checked and validated by comparison with the share of out-of-pocket outlays and by survey questions (e.g. “Were you and family members unable to access needed health services or medicines because of lack of family income?”).

Disaggregation:

By sex and wealth quintile.

Comments and limitations:

To be determined once the indicator has been specified.

Preliminary assessment of current data availability by Friends of the Chair:

TBD

Primary data source:

TBD.

Potential lead agency or agencies:

WHO gathers data on health expenditures by triangulating information from several sources to estimate both government and private expenditures on health.⁴