The Distributional Impact of Healthcare Financing in Nigeria: A Case Study of Enugu State

Hyacinth Ementa Ichoku and William Fonta

Working Papers PMMA from PEP-PMMA

Abstract: The deregulation of healthcare financing and supply in Nigeria has shifted the healthcare system towards competitive market ideals. Households' decision to utilize healthcare is identical with healthcare financing. This financing arrangement has potentials for income redistribution in a society with already high levels of inequality in resource redistribution. This study attempts to examine the extent to which this system of healthcare financing leads to catastrophic expenditures, defined as a threshold percentage of a household's income, and the extend of impoverishment arising from healthcare spending. It also uses the Aronson, Johnson, and Lambert (1994) decomposition framework to analyze redistributive effects in terms of vertical and horizontal inequities, as well as re-ranking effect. The study finds that healthcare spending engenders high incidence of catastrophic spending and impoverishment in the population. It also finds that healthcare spending is pro-rich in its redistributive effect, with significant vertical and horizontal inequities as well as reranking inherent in the system. The paper suggests policy reforms that separate healthcare utilization from healthcare financing if the poor are to have access to healthcare services.

Keywords: Redistributive effects; Healthcare financing; Catastrophic financing; Impoverishing effects; Equity; Nigeria (search for similar items in EconPapers)
JEL-codes: B41 C52 C81 D63 I11 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-afr and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:lvl:pmmacr:2006-17

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