Abstract

At the fifty-eighth World Health Assembly in 2005, the member states of the World Health Organisation (WHO) committed themselves to attaining Universal Health Coverage (UHC) for their citizens. The WHO Regional Committee of Africa reiterated this in its fifty-sixth session in 2006. The framework for implementing the Ouagadougou Declaration on Primary Health Care and Health Systems recommends that countries develop comprehensive health system financing policies and strategic plans to chart the direction of their health financing systems toward achieving universal coverage with prepayment schemes. The primary purpose of this study was to assess the equity of healthcare financing in Malawi through various policies whose goals were to achieve high-quality, equitable, affordable UHC. The specific objectives were to evaluate the relative progressivity of health financing of health financing mechanisms in Malawi and to assess the redistributive effect of health financing mechanisms in Malawi. The paper evaluated three financing sources (direct taxes, private health insurance, and out-of pocket payments (OOP)) independently and as a whole using the Kakwani progressivity index. Secondary data from the Integrated Household Surveys (IHS 2, 3, 4, and 5) were used to achieve this. The results for direct taxes were positive (0.2779, 0.2841, 0.3122, and 0.5208) which shows that they were progressive and got more progressive from IHS2 to IHS5. A question worth considering was whether the taxes redistribute the burden of finance towards the lower income quintile if only taxpayers were considered. The findings showed that IHS 2, 3, and 4 were regressive and only 5 was found to be progressive. A high level of progressiveness was found in insurance (0.602, 0.5419, 0.5784, and 0.596) because only the rich who could afford to pay for insurance paid for it. OOP payments were found to be regressive except for IHS4 which was mildly progressive (-0.0533, -0.0483, 0.0213, and -0.1035). The overall health financing was progressive because of direct taxes and insurance which cancelled out the regressiveness of OOP payments. The total redistributive effect of direct tax and private insurance shows a decrease in income inequality whilst OOOP showed the opposite. As such, the government should expand the user fee exemption to more eligible Christian Health Association of Malawi (CHAM) facilities, include more diseases in the essential health package, and increase its coverage to reduce the incidence of OOP payments.

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School	: School of Law, Economics and Government
Issued Date	: 2024

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