How household healthcare expenditures redistribute disposable income? An analysis using Bangladesh household income and expenditure survey, 2010.

Abstract

Essential healthcare is a civil right. Payments toward healthcare is a moral compulsion, and no less strong than legal compulsion like income tax. Healthcare payments can redistribute disposable income. Redistribution may be vertical (from rich to poor or opposite) and horizontal (from men to women or from households without children to households with children). Health planners are interested in degrees to which redistribution occurs. In this paper, we aim to analyze how well different forms of healthcare payments in Bangladesh redistribute disposable income. Our data comes from Bangladesh Household Income and Expenditure Survey, 2010. Using the methods developed by Aronson et al. (1994), we assessed average rate effect, progressivity, horizontal equity and re-ranking. The results suggest that Bangladesh health systems finance has a pro-rich redistribution of disposable income. Post-payment disposable income decreases for the poor and increases for the rich. As a result, the poor are in a shortfall in disposable income, which ultimately get them to impoverishment, and or push them to deeper poverty. On the contrary, the rich become richer due to increase in post-payment disposable income. This leads to an increase in inequality.