Equity in healthcare

Question 1

What is equity in health?

Answer 1

Equity in health is a multidimensional concept, including both health level, the capabilities needed to achieve that level and the distribution of enabling resources, such as healthcare

Question 2

Vertical equity

Answer 2

• unequal treatment of unequals

Question 3

Horizontal equity

Answer 3

• equal treatment of equals

Question 4

Equity vs equality

Answer 4

Equality implies equal or the same - positivistic approach (mere numbers)

Equity implies a fair distribution
- normative approach (based on values, what is considered fair)

• equal is not always equitable

Question 5

In which contexts do health economists study equity?

Answer 5

• Equity in health
• Equity in health care access
• Equity in health care utilisation
• Equity in health care financing

Question 6

Studying equity in health; important remarks

Answer 6

• involves studying the ‘final outcome’ (i.e. health)
• important to study, but much of ‘health’ is determined outside the health system (health status is subject to modifiable and non-modifiable risk factors, so it may be challenging to evaluate a health system based on equity in health alone)
• to assess equity in health, one might look into the distribution of: life expectancy, different measures of ill-health (e.g. DALYs, number of accidents…), self-assessed health or QALYs

Question 6

QALY vs DALY

Answer 6

Quality-adjusted life years: standardly used in cost-effectiveness analyses, 1QALY= 1 year of life in perfect health (measures years spent in good health gained from a particular intervention)

Disability adjusted life year: mainly used as a measure of disease burden, but can be used in CE analyses
One DALY represents the loss of the equivalent of one year of full health. DALYs for a disease or health condition are the sum of the years of life lost to due to premature mortality (YLLs) and the years lived with a disability (YLDs) due to prevalent cases of the disease or health condition in a population.

Question 7

Studying equity in healthcare access; important remarks

Answer 7

• refers to equity in possibilities to use healthcare
• can be difficult to quantify
• access is influenced by factors such as distance and transport, appointments system, barriers in consultation etc
• access impacts healthcare utilisation, but there are also many other factors affecting utilisation (e.g. perceived need) - utilisation is more frequently studied than access because it is easier to quantify

Question 8

Studying equity in health care utilisation; key remarks

Answer 8

• tales into account both access (i.e. OPPORTUNITIES OF UTILISATION) and whether these opportunities were sought/used in reality
• not every need turns into expression of demand and utilisation
• might measure for example number of visits, hospitalisations etc

Question 9

What kind of equity do studies looking into equity in health care utilisation typically focus on?

Answer 9

• often focus on horizontal equity (‘equal utilisation for equal need’)
• but can also consider vertical equity (for example: do individuals with higher needs utilise appropriately more care?)

Question 10

What kind of equity do studies looking into equity in health care financing typically focus on?

Answer 10

• often focus on vertical equity (e.g. do individuals with unequal ability to pay for health care make appropriately unequal payments?; or ‘is the healthcare financing system progressive, regressive or proportional?)

Question 11

Why do health utilisation and health financing studies tend to focus on different type of equity?

Answer 11

The difference in what type of equity is predominantly studied (i.e. vertical vs horizontal) mainly depends on data availability. To study vertical equity in health care utilisation, one would need to quantify and know what would be the ‘desired unequal distribution’ in care utilisation depending on inequalities among individuals (their needs), which is challenging to determine.

Question 12

Vertical vs horizontal equity in healthcare

Answer 12

Vertical: people in unequal medical need should be treated in an appropriately dissimilar way (e.g. different need for screening services due to age)

Horizontal: persons in equal medical need should be treated in appropriately similar ways (e.g. equal urgency level)

Question 13

Gini index?

Answer 13

• a summary measure of income inequality
• enables comparison of a full distribution across contexts and time, simplifies the comparison
• ranges from 0 to 1
• lower values indicate more equal income distribution

Question 14

Gini index of 0, interpretation

Answer 14

all individuals in the population have the same income, max equality

Question 15

Gini index of 1, interpretation

Answer 15

the richest individual has all income, max inequality

Question 16

What does the gini-index use to showcase the income distribution of a population? (x and y axis?)

Answer 16

Accumulated shares of population income

x axis - cumulative proportion of population ranked by income, from poorest to richest
y axis - cumulative proportion of income

Question 17

Gini index expressed as a line is called the:

Answer 17

Lorenz curve

Question 18

What does the Gini index measure?

Answer 18

the area between the 45 degree line of equality and the Lorenz curve (i.e., the deviation from equality or the ‘inequality’)

Question 19

Gini index and average income, relationship?

Answer 19

The Gini index measures the distribution of income in a population independently of average (i.e. two societies with the same average income can have different Gini indices)

Question 20

Using the gini-index framework for other distributions// gini-type inequality measures - which terminology is used?

Answer 20

• concentration index for X
• concentration curve of X

(income variable only used for ranking individuals; X axis)

Question 20

Values of concentration indices

Answer 20

A concentration index of something else than income can range between -1 and 1

0 = equal
Positive = pro-rich (more concentrated among the rich, curve below the equality line)
Negative = pro-poor (more concentrated among the poor, curve above the equality line)

Question 21

X axis and Y axis for Gini vs concentration index of another Y

Answer 21

X axis - same for both
(the cumulative proportion of the population, ranked by income from the poorest to the richest)

Y axis-
Gini = cumulative proportion of income
Conc = the cumulative proportion of the Y-variable

Question 22

Just because something such as health payments or taxes is ‘pro-rich’ (more concentrated among the rich, curve below the equality line) does not imply equitable distribution, explain

Answer 22

Although overall the richer people may be contributing more to the total health payments or tax revenue, it is also important to consider what share of their income do those payments correspond to (i.e. compare the distribution of tax payments or healthcare payments to real income distribution rather than just the equality line). This can reveal whether the rich are paying proportionately more. (For example, the rich could be paying more overall but only giving 1% of their income on healthcare, while the poor could be contributing less overall but giving 20% of their income of healthcare, which would not be equitable)

Question 23

Interpretation of Kakwani index

Answer 23

Positive value = progressive
0 = proportional
Negative value = regressive

Question 23

Kakwani index?

Answer 23

The Kakwani index equals the concentration index for health care payments minus the concentration index for income
- both indexes are computed in relation to the 45 degree line

The value is between -2 and 1

• the index is calculated for each source of finance individually (e.g. taxes, OOP etc) and a weighted average is then computed

Question 24

The 45 degree equality line always refers to equality in:

Answer 24

income

Question 25

Why does Kakwani index range from -2 to 1?

Answer 25

Kakwani = concentration index for hc payments - conc index for income (Gini)

• conc index for hc payments ranges from -1 to 1
• Gini ranges from 0 to 1

Minimum Kakwani: -1 - (1) = -2
Max Kakwani: 1 - (0) = 1

Question 26

Regressive system

Answer 26

poor individuals pay less or more than the equal distribution (overall, they pay more or less than the rich for healthcare) but in any case, they pay above income distribution (the poorest individuals give a higher proportion of their income for health care payments than the rich individuals)

Question 27

Progressive system?

Answer 27

the poorest individuals pay less than equal distribution (they are paying less overall for healthcare than the rich) AND less than the income distribution (they are giving a lower proportion of their income for healthcare payments than the rich

Question 27

Progressivity?

Answer 27

the extent to which higher-income people pay more as a proportion of their income than lower- income people

Question 27

Proportional tax?

Answer 27

A proportional tax is an income tax system that levies the same percentage tax to everyone regardless of income. A proportional tax is the same for low, middle, and high-income taxpayers.

Question 28

Separate Kakwani indices are usually computed for different types of health financing sources - give some examples of sources and what kind of index they might have

Answer 28

Direct tax (income tax,property tax, wealth tax)
Indirect tax (e.g. tobacco, VAT)
OOP

• direct tax might be progressive,
  tobacco regressive

Question 29

When computing a concentration index for healthcare utilisation, what might be used as an indicator on Y axis?

Answer 29

for healthcare utilisation studies, the y axis can be some kind of healthcare utilisation indicator, e.g. cumulative share of the total number of GP visits or hospitalisations

Question 30

Why is it not sufficient to compare the concentration curve of healthcare utilisation to the (income) equality line?

Answer 30

Because the need for healthcare is associated with income (It is not random compared to income; need is more concentrated in certain sections of the income line and that needs to be accounted for)

‘The degree of inequality in utilisation of medical care will tell us something about the degree of inequity only in the unlikely event that medical need does not vary with income’ (i.e. the fact that there is an inequality in healthcare utilisation when compared to the equal income line does not necessarily reflect inequity because it is to be expected that people at different income levels have different needs) - ‘NEED EXPECTED UTILISATION IMPORTANT!)

Question 31

Important questions when we look into inequalities in healthcare utilisation

Answer 31

• How do we define and measure need for healthcare
• How do we integrate this need measurement in our conc. curves and indices?

Question 32

Possible ways of defining and measuring the need for health care?

Answer 32

• current health status (among the most used measures, simple to quantify)
• capacity to benefit from provided services (how much of an improvement can medical care make; i.e. if someone has a very poor health status but their illness is completely untreatable, their need might not be as high)
• the expenditure needed to restore health (higher exp. needed is assumed to correspond to a higher need)
• minimum resources required to exhaust the capacity to benefit (the higher the min res. required, the higher the need)

Question 33

Current health status - examples of measurement

Answer 33

• Self-assessed health (generic instruments such as EQ5D, VAS or SF-36 or disease-specific instruments)
• Prevalence of chronic conditions or disability (can be assessed by e.g. looking at registers/healthcare records)
• Acute illness/injuries/accidents in a certain time frame
• Previous hospitalisations (expressed as e.g. number of days in a certain time frame)

Question 34

How is the value of need-expected health care utilisation determined?

Answer 34

Using regression models, it can be estimated what level of utilisation would an individual have had they had the same level of utilisation as other individuals with the same need

• these need characteristics could be determined based on age, sex, self-assessed health and self-reported chronic disease
  (can be done irrespective of income!) –> important to consider how ‘need’ was defined in a study –> the more detailed definition of need, the better
• the need characteristics that are calculated in this way can then be compared to the real healthcare utilisation (allows assessment of horizontal inequality; whether equals in need are being treated equally)

Question 35

Adverse selection

Answer 35

Higher-risk individuals tend to be the more common buyers of insurance policies, but insurance companies only know average costs - this might lead to high and frequent insurance claims being made, leading insurance companies to increase their premiums. The increase in premiums will discourage the low-risk people from getting insurance even more, leading to a ‘death spiral’ of growing premiums and only the riskiest individuals being insured. As the low-risk individuals drop out, the average costs among the insured (i.e. the info known to the insurance companies) increases, driving premium charges up. Can be mitigated by risk-adjusted premiums (problems: gathering the required info is expensive and challenging, might lead to insurance being unaffordable to some groups) or mandatory health insurance.

Question 36

Explain the horizontal equity principle

Answer 36

“equal treatment for equal medical
need, irrespective of other characteristics such as income, race, place of residence,
etc.
(In practice, it is not possible to examine the extent to which the horizontal
equity principle is violated without simultaneously specifying a vertical equity
norm - i.e. we need to know what the EQUITABLE degree of INEQUALITY in utilisation is. - To measure inequity, inequality in utilization of health care must be standardized for differences in need.)

‘need-expected utilisation’ vs ‘real utilisation’

• if the horizontal inequity index is positive, that means that at a specific level of need, one group (e.g. the rich) utilises more care than other (e.g. the poor)

Do all people with the same level of need utilise health services equally? (HORIZONTAL)
vs
Do people at greater need utilise proportionally more health services (VERTICAL)