Health care financing and income inequality in Nigeria
International Journal of Social Economics
ISSN: 0306-8293
Article publication date: 7 October 2020
Issue publication date: 22 October 2020
Abstract
Purpose
The purpose of this paper is to decompose the inequities induced by the Nigerian health care financing sources and their effect on the income distribution. Inequities in health care financing sources are of immense policy concern particularly in developing countries such as Nigeria, where high-level income inequality exists, and the cost of medical care is generally financed out-of-pocket (OOP) due to limited access to health insurance.
Design/methodology/approach
The Duclos et al. decomposition model provided the theoretical framework for the study. Data were obtained from two waves of the Nigeria General Household Survey (GHS) panel, 2012–13 and 2015–16. The analysis covered 3,999 households in 2012–13 and 4,051 households in 2015–16. Two measures of health care financing: OOP payment and health insurance contribution (HIC) were used. The ability to pay measure was household consumption expenditure.
Findings
The major inequity issue induced by the OOP payments was vertical inequity. HICs created the problems of vertical inequity, horizontal inequity and reranking among households. Overall both health care financing options were associated with the worsening of income inequality both at the national and sectorial levels in the country. The operations of the NHIS need to be improved to ensuring improved health care coverage for the poor.
Originality/value
This paper fulfills an identified need to determine the income redistributive effects (REs) of the social health insurance (SHI) contribution at the national, urban and rural locations overtime.
Keywords
Acknowledgements
The authors wish to specially appreciate Dr.AraarAbdelkrim of the Department of Economics, Laval University Canada. For providing the Ados and stata codes for the analysis.
Citation
Oburota, C.S. and Olaniyan, O. (2020), "Health care financing and income inequality in Nigeria", International Journal of Social Economics, Vol. 47 No. 11, pp. 1419-1431. https://doi.org/10.1108/IJSE-05-2020-0286
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited