The redistributive effect of the public health system: the case of Sierra Leone

Abstract

Abstract Universal health coverage (UHC), health equity and reduction of income inequalities are key objectives for the Sierra Leone government. While investing in health systems may drive economic growth, it is less clear whether investing in health systems reduces income inequality. Therefore, a crucial issue is to what extent the Sierra Leone public healthcare system reduces income inequality, and finances and provides healthcare services equitably. We use data from the Sierra Leone Integrated Household Survey 2018 to complete a financing and benefit incidence analysis of the Sierra Leone public healthcare system. We extend these analyses by assessing the redistributive effect of the public healthcare system (i.e. fiscal incidence analysis). We compute the redistributive effect as the change in Gini index induced by the payments for, and provision of, public healthcare services. The financing incidence of the Sierra Leone public healthcare system is marginally progressive (i.e. Kakwani index: 0.011*, P-value <0.1). With regard to public healthcare benefits, while primary healthcare (PHC) benefits are pro-poor, secondary/tertiary benefits are pro-rich. The result is that overall public healthcare benefits are equally distributed (concentration index (CI): 0.008, not statistically different from zero). However, needs are concentrated among the poor, so benefits are pro-rich when needs are considered. We find that the public healthcare system redistributes resources from better-off quintiles to worse-off quintiles (Gini coefficient reduction induced by public healthcare system = 0.5%). PHC receives less financing than secondary/tertiary care but delivers a larger reduction in income inequality. The Sierra Leone public healthcare system redistributes resources and reduces income inequality. However, the redistributive effect occurs largely thanks to PHC services being markedly pro-poor, and the Sierra Leone health system could be more equitable. Policy-makers interested in improving Sierra Leone public health system equity and reducing income inequalities should prioritize PHC investments.