Equity in Health Care Financing in the Palestinian Context : The Value-Added of the Disaggregate Approach

This paper analyzes the redistributive effect and progressivity associated with the current health care financing schemes in the Occupied Palestinian Territory (OPT), using data from the first Palestinian Household Health Expenditure Survey conducted in 2004. The paper goes beyond the commonly used, aggregate summary index approach, to apply a more detailed, disaggregate approach. Such an approach is borrowed from the general economic literature on taxation, and examines redistributive and vertical effects over specific parts of the income distribution, using the dominance criterion. In addition, the paper employs a bootstrap method (BTS) to test for the statistical significance of the inequality measures. While both the aggregate and disaggregate approaches confirm the pro-rich and regressive character of out-of-pocket payments, the aggregate approach does not ascertain the potential progressive feature of any of the available insurance scheme. The disaggregate approach however significantly reveals a progressive nature, over half of the population, of the government health insurance scheme; and demonstrates that the regressivity of the out-of-pocket payments is most pronounced amongst the worst-off classes of the population. Recommendations are advanced to improve the performance of the government insurance schemes to enhance its capacity in limiting inequalities in health care financing in the OPT