Background: The bulk of health care financing in Cameroon is derived from out-of-pocket payments. Given that poverty is pervasive with a third of the population living below the poverty line, health care financing from out-of-pocket payments is likely to have redistributive and equity effects. Out-of-pocket payments on health care limit the ability of households to afford non-healthcare goods and services.
Method: The study uses data from the 2014 Cameroon Household Survey to estimate the Kwakwani index for analyzing tax progressivity and the model developed by Aronson, Johnson, and Lambert (1994) to measure the redistributive effect of out-of-pocket payments for health care. The estimated indexes measure the extent of the progressivity of health care payments and the reranking that results from the payments.
Results: The results indicate that out-of-pocket payments for health care in Cameroon in 2014 represented a significant share of household prepayment income. The estimates also show that the redistributive effect is positive implying that health care payments are weakly progressive and will weakly enhance equity and post-payment reranking is low.
Conclusion: The study concludes that out-of-pocket payments on health care in Cameroon are progressive (income redistributive effect = 0.00144). A positive redistributive effect suggests that out-of-pocket payments on health care exert an equalizing effect on the distribution of post-payment incomes. However, the existence of some horizontal inequity and re-ranking implying that people in the same income band are treated unequally depending on the burden of ill-health.