The Impoverishing Effect of Adverse Health Events : Evidence from the Western Balkans

This paper investigates the extent to which the health systems of the Western Balkans (Albania, Bosnia and Herzegovina, Montenegro, Serbia, and Kosovo) have succeeded in providing financial protection against adverse health events. The authors examine disparities in health status, healthcare utilization, and out-of-pocket payments for healthcare (including informal payments), and explore the impact of healthcare expenditures on household economic status and poverty. Methodologies include (i) generating a descriptive assessment of health and healthcare disparities across socioeconomic groups, (ii) measuring the incidence and intensity of catastrophic healthcare payments, (iii) examining the effect of out-of-pocket payments on poverty headcount and poverty gap measures, and (iv) running sets of country-specific probit regressions to model the relationship between health status, healthcare utilization, and poverty. On balance, the findings show that the impact of health expenditures on household economic wellbeing and poverty is most severe in Albania and Kosovo, while Montenegro is striking for the financial protection that the health system seems to provide. Data are drawn from Living Standards and Measurement Surveys.