Household health care spending and health care reforms in Serbia

Abstract

Acknowledgement:The study is financed by the European Commission under the 7th Framework Programme, Theme 8 Socio-economic Sciences and Humanities, Project ASSPRO CEE 2007 (Grant Agree- ment no. 217431). The views expressed in this publication are the sole responsibility of the authors and do not necessarily reflect the views of the European Commission or its services.
Abstract: The aim of this paper is to provide empirical data on out-of-pocket, indirect and informal payments in ambulatory health care and state hospitals and to study the catastrophic effects that these payments can produce for households` budget. For this purpose, household data collected in Serbia in 2007 are used. The health care system in Serbia, inherited compulsory health insurance from SFRJ (Socialist Federal Republic of Yugoslavia) based on 12.3% payroll taxes. In 2002, after the political change in the country, the Ministry of Health officially introduced the health care reforms as a part of transitional reforms. One of the aims of these reforms was to obtain a clear picture about the flow of the money in health care system. In 2005, it became clear that Serbia spent 5.33 % of GDP on public health services, and 8 % of GDP for total health expenditure. This was comparable to other countries in the region but higher than in EU countries. This paper focuses on the relation between out-of-pocket payments by Serbian households and poverty that can be related to health care spending. Although it is expected that official co-payments will decrease informal payments, this is not al- ways observed in practice. Some patients use service that required co-payment, but do not pay. This might im- ply possible informal payments. The recent research has shown the catastrophic effects of out-of-pocket payments not only in low and middle income countries, but also in some OECED countries. Our results also indicate that out-of-pocket patient payments have a catastrophic effect on poor households in Serbia. More- over, households that are above the absolute and relative poverty lines respectively, after the subtraction of out-of-pocket payments fall below these poverty lines. Thus, our research shows, that no matter which ap- proach we apply, the out-of-pocket patient payments in Serbia create a substantial burden on households. Nevertheless, it is important to apply different approaches since the nature of poverty is more complex and also includes subjective perceptions. Future policy in Serbia should aim to protect vulnerable groups, espe- cially chronically sick patients and people from rural areas.