Catastrophic health expenditure during healthcare financing reform: Evidence from Kazakhstan

Unequal access to healthcare and inadequate financing have highlighted the need for healthcare reform to increase efficiency while ensuring equity in healthcare financing worldwide. Our study evaluates the capacity of Kazakhstan's healthcare system reform, transitioning from a tax-financed system to compulsory social health insurance (CSHI), to address equity in healthcare financing. Using quarterly Household Budget Surveys from 2017-Q1 to 2020-Q4 in a staggered difference-in-difference estimation technique, we analyze the impact of the transition on the incidence and intensity of catastrophic health expenditure (CHE) and impoverishment. Our findings show that while the transition from a tax-financed to a CSHI system in the short run lowers both the incidence and intensity of catastrophic health expenditure, it does not alleviate impoverishment. In particular, the reform predominantly benefits wealthier households, with no effect on the relatively poor population. We speculate that the positive outcomes observed from the reform in the short run are largely attributed to the exceptionally high insurance coverage during the transition period. The success of the transition from a tax- based to an insurance-based system is heavily dependent on the rate of insurance coverage of the population, as well as the quality of healthcare services and available finances.