Pro-Poor Health Financing Policies and Financial Protection Outcomes in East Asia

Background and Purpose: Ill health and the resulting financial loss are major reasons for household impoverishment. Over the past decades, many countries have adopted pro-poor health financing approaches, aiming to reduce financial barriers for the poor. Prior studies focused on comparing the social health insurance scheme and paid much less attention to medical financial assistance. The configuration of multiple health financing schemes also remains understudied. This study focuses on East Asia where divergent socioeconomic characteristics and diverse health system arrangements exist across societies, and proposes the following questions: What are the policy divergences of pro-poor financing schemes in East Asia? What are the subsequent policy outcomes under diverse policy designs?

Methods: This study compares two pro-poor health financing schemes (i.e., social health insurance and medical financial assistance) and the financial protection outcomes in six societies (Mainland China, Hong Kong, Taiwan, Japan, Korea, and Singapore). We compared two schemes from the perspective of eligibility and generosity. Two indicators were calculated from country/regional-level official statistics. Financial protection outcomes were captured by catastrophic health spending and impoverishing health spending, calculated based on the individual information constructed by the model family approach. We set four income cases for individuals: (1) earning no income; (2) earning minimum wage in each society; (3) earning half of the national/regional average wage; (4) earning the national/regional average wage. Descriptive analysis was performed to compare two health financing schemes and policy outcomes across societies.

Results: We found that health financing schemes in Taiwan and Hong Kong are the most generous, with moderately lenient eligibility. Japan provides the most lenient eligibility and offers relatively generous benefits. Mainland China and South Korea are less generous in providing benefits and have moderate eligibility. Singapore provides strict eligibility and limited benefits for the low-income population. Pro-poor health financing schemes in six societies reduce the financial burden to varying degrees. Taiwan and Hong Kong offer the best financial protection, while Singapore plays a limited role in mitigating financial risks for the poor. Besides, we also found in Mainland China, South Korea, and Japan, individuals earning half of the average wage are more likely to incur catastrophic health spending due to the ineligibility for medical benefits.

Conclusions and Implications: This study is the first attempt to systematically compare the design of pro-poor health financing policies in East Asia. We also provide methods to compare healthcare financial burdens and benefits from different individual types across countries. Our findings reveal the heterogeneities in health financing designs and levels of financial protection for the low-income population in East Asian societies. This study furthers the understanding in healthcare systems in East Asia and provides evidence for governments to reform their health policy. For instance, we suggest that six societies should expand the benefit packages to cover the marginalized poor. Pro-poor health financing can be further enhanced in Singapore.