Most OECD countries finance the great majority of their essential health services from public sources3
and endorse the equity principle that these services ought to be allocated on the basis of need and not willingness or ability to pay.4
Therefore, a logical yardstick for international comparisons based on this principle of horizontal equity is the degree of inequality in use by income that remains after standardization for (measurable) need differences.
The data for 10 European Union countries (Austria, Belgium, Denmark, Finland, Greece, Ireland, Italy, the Netherlands, Portugal and Spain) are taken from the 2000 wave of the European Community Household Panel (ECHP) survey conducted by Eurostat, the European Statistical Office. The survey is based on a standardized questionnaire and involves annual interviewing of a representative panel of households and people 16 years and older in each European Union member state.5
It covers a wide range of topics, including demographic characteristics, income, social transfers, health, housing, education and employment. The national surveys used for the other 11 countries are listed in . Except for the United States (1999), the surveys refer to 2000 or a more recent year, and all are nationally representative of the free-living adult population. They were selected on the basis of their suitability for this analysis and their comparability to the ECHP data.
Measurement of annual health care utilization was based on the ECHP question “During the past 12 months, about how many times have you consulted a general practitioner or a medical specialist?” Similar 12-month reference-period questions were used for the other countries, although not all surveys had all information. Some countries' surveys (Australia, Germany, Mexico, Sweden and the United States) did not distinguish between general practitioner (GP) and specialist visits.
Variation in the number of physician visits is explained using health, income and other factors. As predictors of need for care, we used age, sex, self-reported general health and the presence and degree of limitation of any chronic physical or mental health problem, illness or disability. Income was measured by disposable (i.e., after-tax) household income per equivalent adult. Some surveys (e.g., for Australia, Canada) provided only categorical income data. Other explanatory variables used in the analysis were education and activity status. Where available, 2 more policy-relevant variables were used: (private) health insurance coverage for medical care expenditures, and region of residence (as a proxy for availability of care) or urban–rural division. For most ECHP-based countries, no health insurance information and only very limited regional identifier information were available.
For all types of care, we computed need-expected use — or use adjusted according to expected need — by running a linear regression for all people in the sample on the full set of explanatory variables. For need predictors, we used indicator variables for 9 age–sex groups, 4 self-assessed health groups, and 2 groups indicating the extent to which a person is hampered in his or her usual activities by a chronic condition or handicap. Need for care is then defined as a person's expected use of medical care on the basis of actual need characteristics, with the effects of all other variables “neutralized” by their being set at their sample means in the prediction stage. Need then indicates the amount of medical care a person would have received had that person been treated the same as others with the same need characteristics, on average. We have used sample weighted least squares estimation, since the inequity indices and quintile distributions obtained are very similar to those obtained using more sophisticated nonlinear models.2,6
To measure the degree of horizontal inequity in health care use we compared the actual observed distribution of medical care by income with the need-expected distribution of use. As such, the method assumes that the average treatment rates for each country, and the average treatment differences between people in unequal need, reflect the accepted overall “norm” for that country. In other words, this method looks only at relative inequalities in mean use levels by income after any need differences have been standardized for.
The degree of inequality in health care utilization can be measured using the concept of a concentration curve7,8
(). This plots the cumulative distribution of use as a function of the cumulative distribution of the population ranked by its income. A distribution is equal if its concentration curve coincides with the diagonal. A curve that lies above the diagonal indicates that use is more concentrated among the poor. A concentration index measures the degree of inequality in actual
use as the area between the curve and the diagonal. Our index of horizontal inequity (HI) is simply a concentration index of inequality in need-standardized
use. Robust estimates of the concentration index and HI index and its standard error can easily be obtained by running a convenient (weighted least squares) regression of a transformation of the variable on relative rank in the income distribution.9
When the HI index equals zero, it indicates horizontal equity: people in equal need (but at different incomes) are treated equally. When the index is positive, it indicates pro-rich inequity, and when it is negative, it indicates pro-poor inequity. The latter means that lower-income people seem to be using more care than one would expect simply on the basis of reported need (i.e., morbidity). Decomposition analyses (not reported here) help to provide further detail on the explanatory factors driving the measured inequities.2
Fig. 1: Sample of a concentration curve of medical care use. Distribution of use is equal among income levels if the concentration curve coincides with the diagonal; a curve that lies above the diagonal indicates that use is more concentrated among the (more ...)