Out-of-pocket payments in the Austrian healthcare system – a distributional analysis

BACKGROUND: Out-of-pocket spending is an important source of healthcare financing even in countries with established prepaid financing of healthcare. However, out-of-pocket payments (OOPP) may have undesirable effects from an equity perspective. In this study, we analyse the distributive effects of OOPP in Austria based on cross-sectional information from the Austrian Household Budget Survey 2009/10. METHODS: We combine evidence from disaggregated measures (concentration curve and Lorenz curve) and summary indices (Gini coefficient, Kakwani index, and Reynolds–Smolensky index) to demonstrate the distributive effects of total OOPP and their subcomponents. Thereby, we use different specifications of household ability to pay. We follow the Aronson–Johnson–Lampert approach and split the distributive effect into its three components: progressivity, horizontal equity, and reranking. RESULTS: OOPP in Austria have regressive effects on income distribution. These regressive effects are especially pronounced for the OOPP category prescription fees and over-the-counter pharmaceuticals. Disaggregated evidence shows that the effects differ between income groups. The decomposition analysis reveals a high degree of reranking and horizontal inequity for total OOPP, and particularly, for therapeutic aids and physician services. CONCLUSIONS: The results – especially those for prescription fees and therapeutic aids – are of high relevance for the recent and on-going discussion on the reform of benefit catalogues and cost-sharing schemes in the public health insurance system in Austria.