Decomposing Inequality in Health Care Utilisation in Palestine : A Microsimulation Approach

Income-related inequalities and horizontal inequity in health-care utilisation have recently been widely studied using linear additive models of decomposition. This paper applies new methods of decomposition by factors, based on microsimulation technique. Besides avoiding the unavoidable price of linearity restriction that is imposed by the standard method, the microsimulation-based decomposition enables ducking the potentially contentious role of heterogeneity in genuine individuals' beaviour in the analysis of inequality, as well as the institutional features and practices driving inequity. The decomposition method is applied to two-stage utilisation (the probability of usage and the conditional usage - using the combined Logit, zero truncated Negbin models) for three levels of health-care delivery: primary, secondary and tertiary, particular to the specific context of the two occupied territories of Palestine (OPT): the West Bank (WB) and Gaza Strip (GS). The data are taken from the first national survey on health care use and expenditure, which provide detailed information about utilisation and morbidity. Our empirical results suggest that the worse-off do have disproportionately greater need for all levels of care, but with the expectation of primary-level, access to - and ustilisation of - all levels of care appear to be significantly higher for the better-off. The incremental examination through microsimulation has made it possible to separately identify the relative contributions of factors driving such pro-rich patterns. While much of this inequity appear to be caused by omnipresent socio-economic inequalities (by income), detailed analysis attributes a non-trivial part (circa 30% of the observed horizontal inequities) to heterogeneity in behaviour with respect to the rank of individuals in the income distribution. The latter finding, which cannot be explicitly elucidated by the standard decomposition, corroborates earlier evidence on the importance of considering such axis in order to provide a more convincing decomposition, and for judging equity performance of health system. Several policy-relevant factors, which have to be taken into account for any future attempt aiming at limiting the existing inequalities in the current health care delivery systems of the OPT are discussed and identified