Measuring financial protection against catastrophic health expenditures: methodological challenges for global monitoring

Monitoring financial protection against catastrophic health expenditures is important to understand how health financing arrangements in a country protect its population against high costs associated with accessing health services. While catastrophic health expenditures are generally defined to be when household expenditures for health exceed a given threshold of household resources, there is no gold standard with several methods applied to define the threshold and household resources. These different approaches to constructing the indicator might give different pictures of a country’s progress towards financial protection. In order for monitoring to effectively provide policy insight, it is critical to understand the sensitivity of measurement to these choices.

This paper examines the impact of varying two methodological choices by analysing household expenditure data from a sample of 47 countries. We assess sensitivity of cross-country comparisons to a range of thresholds by testing for restricted dominance. We further assess sensitivity of comparisons to different methods for defining household resources (i.e. total expenditure, non-food expenditure and non-subsistence expenditure) by conducting correlation tests of country rankings.

We found country rankings are robust to the choice of threshold in a tenth to a quarter of comparisons within the 5–85% threshold range and this increases to half of comparisons if the threshold is restricted to 5–40%, following those commonly used in the literature. Furthermore, correlations of country rankings using different methods to define household resources were moderate to high; thus, this choice makes less difference from a measurement perspective than from an ethical perspective as different definitions of available household resources reflect varying concerns for equity.

Interpreting comparisons from global monitoring based on a single threshold should be done with caution as these may not provide reliable insight into relative country progress. We therefore recommend financial protection against catastrophic health expenditures be measured across a range of thresholds using a catastrophic incidence curve as shown in this paper. We further recommend evaluating financial protection in relation to a country’s health financing system arrangements in order to better understand the extent of protection and better inform future policy changes.