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Who pays for Health

Dr Wayne Irava
Sunday, December 16, 2012

HAVE you ever wondered how much money you spend annually on health? The average person in Fiji usually does not know.

However the average person does know how much he or she approximately spends on food, on rent, transport and education. Perhaps then, health expenditure to the average person is not as important as paying for food or rent.

One possible reason why we don't usually monitor our health expenses is because health expenditure is not routine predetermined expenditure. It does not require payment every month like rent does. We don't visit a medical doctor or health facility every month.

Unless of course you have some known long-term illness, or you're like me; easily catching whatever bug is in season. For most of us, we seek medical attention only when the situation requires it.

This then implies that we cannot predict when we will next require some medical attention, and thus perhaps incur some medical expense. And when you live in Fiji, where public medical services are mostly free of charge (ignoring for now user fees and indirect costs), we rarely think about the costs of healthcare.

In health financing, the indicator used to estimate how much people in a country are paying for health is called 'out-of-pocket' expenditure or OOP.

In Fiji, National Health Accounts (NHA) reports estimate this figure as $FJ 50.1 million dollars in 2010. What does this mean? This means that on average for Fiji in 2010, taking an estimated population size of 850,700 each person is perhaps paying approximately $FJ 58.89 annually on health expenses.

However a large amount of the OOP estimate comes from private health services including private GPs, private hospital, private dentists, optometrists and chemists.

And in Fiji we know that these services are mainly clustered around urban areas. If we therefore take an estimated urban population of 431,660 then each person living in an urban area is on average paying $FJ 116.06 on health expenses annually.

Compare the $FJ 116.06 spent on health annually with your annual rent, fuel expense or perhaps education for the kids. Most likely it is a drop in the ocean for most of the working class population. For instance if your annual income was $FJ 5000 dollars then your estimated OOP represents about 2.3% of your annual income. Someone from the US or Australia would find this unbelievable considering the amount they spend on health!

When we compare Fiji with other Pacific Islands Countries (PICs) in terms of OOP per capita, we find that Fiji leads the pack. For example Samoa states this figure as $FJ 50.00 in 2009, Tonga as $FJ 53.00 in 2008 and Vanuatu as $FJ 14.00 in 2007.

However when PICs are compared to most Asian countries, we find ourselves at the tail end. The less developed private health sector is one reason for low OOP amongst most PICs. Australia estimates OOP per capita in 2010 at $AUS 980.00 and New Zealand at $NZ 344.00. It is thus not surprising to find the Aussies and Kiwis visiting the local dentists when on holiday in Fiji.

So who is footing the bill for your health if the average person in Fiji is paying so little? The answer to that, and true for almost all PICs, is the Government.

Across all PICs, Governments pay no less that 60 per cent of all health expenditure in the country. In 2010 the Fiji Government paid 60.8 per cent of the nation's total health expenditure costs.

This percentage is expected to increase with the recent announcement of an increase in the government health budget for 2013.

So where does the Government get money to pay for health? Well mostly from government revenue via taxes (It gets almost nothing from user-fee revenues charged at Public health facilities in case you're thinking that's the 'cash cow'). And where do taxes come from? That's right, some from your pocket. So taking that into account, the average tax abiding citizen in Fiji may be paying a little more than the $FJ 116.06 mentioned previously.

I have attempted to estimate this and thus answer the question prompted in the title of this article, "How much are you paying for health".

My estimate is that in Fiji in 2010, on average every person spent $FJ295 dollars from their pockets for health expenses.

Now honestly compare this figure with what you spend annually on food, rent, transport, education, church activities, family functions and other entertainment. On whether that amount is too little or too much depends perhaps on your economic status and your health condition. My hunch is that for most people in Fiji, health expenditure OOP relative to other expenses is minimal.

nDr Wayne Irava works at the Centre for Health Information, Policy & Systems Research, College of Medicine Nursing and Health Sciences, Fiji National University. The views expressed are solely those of the author and do not necessarily represent those of this newspaper.

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