Many is also an issue of who is

Many low middle income countries try over the years to find better
ways of financing their health systems. Common among many of these systems is inability
to mobilize sufficient resources to provide the desired level of health care
for the citizens 9– 13.

150 million people suffer catastrophic expenditure each year and 100 million
are pushed into impoverishment because of the expenses of health services 9–
13. This indicates a lack of financial risk protection in low-income
countries. The global healthcare expenditure has risen from 3% of world GPD in
1948 to 7% in 1997 and recently to 9% in 2010, yet millions are pushed into
further poverty due to paying directly for health care services. So financing
health care is not only an issue of spending more money for health care; it is
also an issue of who is required to pay, when they pay and how the money is
spent 9– 13.

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         2.1  Health insurance status in Jordan

Over seventy-five percent of Jordanians are covered with some form
of health insurance (civil, military, UNRWA, and private). Those who are not
covered do not necessarily lack access to health care. Any individual can
utilize Ministry of Health (MOH) services and pay subsidized charges (15-20% of
cost). Therefore, MOH provides a safety net for Jordanians who need health care
and have no insurance 14.

The Civil Insurance Program CIP run by MOH is the
largest health insurance provider as it covers 34 percent of the population,
mainly all government employees and their dependents, the poor, the disabled,
children below six years of age, senior citizens over sixty years of age,
pregnant women, and blood donors. Jordanians below the poverty line are
eligible for CIP’s insurance 14. Military insurance MI covers 27 percent of
the population, mainly military personnel, and their dependents. UNRWA covers
eligible Palestinian refugees in Jordan (9 percent of the population) with free
primary health care and contributes to the cost of inpatient health services
14. Private health insurance covers 8 percent of the population and it is
administered either by private insurance companies or by self-insured systems.
Insured population pays fixed premiums in addition to co-payments whenever
services are used 14.

studies have, surprisingly, found a positive relationship between insurance and
prevalence of catastrophic health expenditures. In Zambia, health insurance did
not provide financial protection against the risk of catastrophic expenditures,
rather it increased the risk 15. Cavagnero, et al. found no evidence that households
with social health insurance coverage are protected against catastrophic health
expenditures. They concluded that the issue is not so much the presence of
health insurance coverage but the depth of the coverage in terms of benefits
package 16.



      2.2 Healthcare
financing system

Countries have to provide sufficient resources in order to afford
the primary health care for the population, pay for that health care, and
financially protect the population from the poverty related to the catastrophic
expenditure 17. Developing countries, those with low income in particular, face
many difficulties in providing sufficient resources to equally satisfy primary health
care, while middle–income countries pay more attention on providing overall coverage
to their populations 17.

The process of health financing aims to provide funding to the health
care sector and to motivate the providers to produce assistance. The successful
health financing process leads to lower rate of inability to pay for health
services, and thus lower rate of poverty due to OOP health payments 9.

In addition to the contribution of the private sector,
the role of government in financing health services is still the key one. The
effect of governmental financing in protecting households from catastrophic
health expenditure was observed in a study by Xu et al. 19 in which a
negative correlation was found between the rate of catastrophic expenditure and
the proportion of governmental contribution in health financing in 89

Two main approaches are usually adopted by countries to finance
health sector: General Taxation (GT) and Social Health Insurance (SHI). With GT, governments depends on taxes
in health financing to provide their population with health services for free
or at very low costs. Unfortunately, low and middle-income countries face
problems in applying this approach because the high extent of poverty makes
taxes insufficient to meet the needs of the health sector 20. In SHI approach a
self-directed organization saves individuals’ prepayments on which it depends
to later finance their health needs if they get ill.

National Health Accounts have shown in 2013
that the government contributes to about 61.47 percent of the total health
financial funding, about 34.78 percent are provided by private agencies, and
the remaining 3.75 percent comes from international sources 6. The
governmental contribution occurs as taxes-based allocations from the Ministry
of Finance (MOF) to the RMS, MOH. The private funding consists of payments by
people for private commercial insurance, expenditures by self-insured companies
on health care services for their employees, and OOP payments for health care
and for medications at pharmacies 6.



Catastrophic Health Expenditure and Impoverishment:


2.3.1. Definition and measurement of catastrophic health

Health expenditures become
catastrophic when households are forced to decrease their basic consumption,
sell properties, and borrow, in order to cover healthcare costs to an extent
that their living standards are disrupted 3.

Two methods are usually employed to
evaluate whether the health expenditure is catastrophic or not: Van Doorslaer
et al. 21 method and Xu 3 method. Both methods share the idea that
out-of-pocket payments (OPP) for health care should exceed a certain level in
order to be considered catastrophic. Van Doorslaer et al. reported that OPP for
health care is considered to be catastrophic if the ratio between OPP and the
total expenditure exceeds a pre-specified fraction, usually 10 percent of total
expenditure. On the other hand, Xu considered OOP expenditures on health
services catastrophic if it exceeds 40% of the capacity to pay. The household’s
capacity to pay is defined as the remaining income after basic necessary needs
(payments on food) have been paid for.



2.3.2. Prevalence of catastrophic health expenditure:

According to WHO it is estimated that every year, around 44 million
households, or more than 150 million individuals, face catastrophic expenditure
worldwide, and approximately 25 million households or more than 100 million
individuals are pushed into poverty due to the health care payments 18.

On a global scale, the percentage of households that faced
catastrophic expenditure from out-of-pocket health payments varied widely among
countries, from less than 0·01% in the Czech Republic and Slovakia to 10·5% in
Vietnam 2, 22, 23. In general, lower rates of catastrophic health expenditure
were reported by the studies on the developed countries compared to those conducted
on the developing countries.

In the Arab world, a little amount of data have been found on catastrophe
and poverty levels resulting from health OOP payments. A study by Elgazzar et
al. 5 examined the types of out-of-pocket payments in six countries in the
Middle East and North Africa explained the effects of that OOP expenditure on the
standards of living of the population. The study indicated that the examined
households paid an average of 6% of their total expenditure on health. Most of
those out-of-pocket payments were spent on medications, doctor visits, and
diagnostic services. The study also found that 7% to 13% of the households
faced out-of-pocket payments equal to or higher than 10 percent of the total household

The contribution of OOP payments to the total health expenditure
was found high many Arab countries. Egypt’s National Health Accounts for 2008
25 indicated that OOP payments accounted for 60 percent of total health
expenses. In Palestine, 43.1 percent of the total health expenditure were OOP
in 2011 26, and in Jordan the percentage was 42.3 percent in 2008 27.

When we come to the numeric data on catastrophic health
expenditure, some numbers were found. Proportions of households with
catastrophic health payments in Lebanon and Yemen were reported at 5.17% and
1.665, respectively 2. Rashad et al. 28 examined the catastrophic health
expenditure and the related poverty in Egypt. Results have shown that 6% of the
households faced financial catastrophe from health payments. A study on
catastrophic health expenditure Palestine between 1998 and 2007 29. Found
that the incidence of catastrophic health payments was relatively low; only 1%
of the examined households spent more than 40% of their capacity to pay (total
household expenditures after necessary needs, such as food, have been paid for)
in 1998. However, the percentage nearly doubled in 2007 and the percentage of
households who fell into deep poverty increased from 11.8% in 1998 to 12.5% in


2.3.3. Factors related to catastrophic health expenditures:

Several studies were conducted to assess the factors generally
related to catastrophic expenditures such as poverty, aging, chronic illnesses,
low levels of insurance coverage, financing system, rural/urban differences,
socio-economic status, types of illness, demographic composition of the
household, and the characteristics of household head such as age, sex, and
education 30-34. They found that gender, education and working status of the
household head are the key variables in explaining catastrophic health
expenditures. Being employed and having a higher level of education could be
associated with more opportunities to cope with the financial burden such as
borrowing money or selling assets.

The influence of health insurance on the incidence of catastrophic
health expenditures had shown a limitation in decreasing or eliminating
catastrophic health expenditures; even with health insurance, poor households
were still at significant risk of catastrophic expenditure 35.

A study was conducted in Serbia by Arsenijevic et al. 36 to
evaluate the catastrophic health expenditure as well as the related poverty in
Serbia. The sample consisted of 5557 households with 17,375 participants. The
results have shown that out-of-pocket payments have a catastrophic effect on
poor households in Serbia. They also have shown higher rates of catastrophic
health expenditure in rural areas, in larger households, and among chronically
sick household members.

In another study, Van Minh et al. 37 examined the catastrophic
expenditure and impoverishment problems in Vietnam between 2002 and 2010. They
found that catastrophic and poverty impacts of out-of-pocket payments were more
common among the households who had more elderly people and those located in
rural areas.

Anbari Z. et al. 38 conducted a cross-sectional study in Iran to
examine financial expenditure on inpatient and outpatient health care services
and to assess the predictors of catastrophic costs for inpatient health care in
one of the central provinces of Iran. The Iranian data consisted of 760
households. Hospitalizations due to inpatient care needs, household members
aged 40-59 years old, especially with chronic diseases and poor status of the
household were the highest predictors of facing catastrophic costs and reported
that 42.6% of hospitalized participants encountered catastrophic expenditure.

et al. 39 quantified the extent of household catastrophic health expenditure
and examined the related predicting factors in Burkina Faso.  They reported the economic status of the
household as a key determinant of catastrophic health expenditures.

Georgia, Gotsadze et al. 34 reported that households in the richest quintile
were four times less likely to face catastrophic expenditure when compared with
the poorest quintile.


illness is an important factor to predict catastrophic health expenditure 33.
Household members with chronic diseases are more likely to use health services,
and therefore, have a higher probability of experiencing catastrophic


2.3.4. Economic consequences and Strategies to deal with
catastrophic health expenditure:

Health care costs can cause financial problems directly through
payments on the healthcare, and indirectly because of losing income as a result
of the inability to work. Some households may use savings, borrowing or selling
assets to cope with health shocks. Other households with limited options may
get forced to cut their spending on essential goods to cover their health

Households need to develop strategies to cope with the expenses of
disease treatment. The aim of these strategies is to maintain the financial
viability of the household. Some strategies are based on mobilizing funds to face
direct costs such as borrowing or selling assets. The ability of households to
deal with health shocks depends on their assets portfolio, in addition to the
type, severity, duration of disease and the family members affected 35.

Xu examined the strategies adopted by households in 15 African
countries to deal with health problems 40. They also investigated whether
households coping strategies vary significantly between financing outpatient
services, inpatient services, and routine care. Low government health spending
and lack of health insurance are key characteristics of these countries. The
average public health spending in these countries is nearly 40% of total health
spending. The results indicated that in 12 countries high inpatient spending increased
the probability of borrowing or selling assets. Moreover, urban households were
less likely to use coping strategies than rural households. The study reported
that in 11 countries households headed by males were less likely to borrow or
sell assets. The study also reported that households headed by old members
(above 60 years) were more likely to borrow or sell assets.