Assessing progressivity and catastrophic effect of out-of-pocket payments for healthcare in Canada: 2010–2015

Equity in healthcare is an important policy objective of the Canadian healthcare system. Out-of-pocket payments for healthcare (OPPH) by Canadian households account for a substantial share of total healthcare expenditures. Using data from Statistics Canada’s Survey of Household Spending (SHS, n = 33,367), this study examined the progressivity and catastrophic effect of OPPH in Canada over the period 2010 to 2015 inclusive. The Kakwani Progressivity Index (KPI) was used to measure the progressivity of OPPH for each year of the study period. The catastrophic effect of OPPH was calculated using a threshold of 10% of total household consumption. The computed KPI indicated that OPPH are a regressive source of healthcare funding in Canada and the regressivity of OPPH has increased over the study period. This indicates that the distribution of OPPH in Canada is not equitable and the percentage contribution of households from their total consumption to healthcare as OPPH decreases as their consumption increase. The results also suggested that 7% of Canadian households face catastrophic out-of-pocket payments for healthcare (COPPH) over the study period. The proportion of households with COPPH was higher in rural areas compared with urban areas over the study period. Policies to enhance financial risk protection among low-income and rural households are required to improve equity in healthcare financing in Canada.