Out of pocket payments and social health insurance for private hospital care: Evidence from Greece

Abstract

The Greek state has reduced their funding on health as part of broader efforts to limit the large fiscal deficits and rising debt ratios to GDP. Benefits cuts and limitations of Social Health Insurance (SHI) reimbursements result in substantial Out of Pocket (OOP) payments in the Greek population. In this paper, we examine social health insurance's risk pooling mechanisms and the catastrophic impact that OOP payments may have on insured's income and well-being. Using data collected from a cross sectional survey in Greece, we find that the OOP payments for inpatient care in private hospitals have a positive relationship with SHI funding. Moreover, we show that the SHI funding is inadequate to total inpatient financing. We argue that the Greek health policy makers have to give serious consideration to the perspective of a SHI system which should be supplemented by the Private Health Insurance (PHI) sector.

Keywords: Financial catastrophe; Greece; Health shock; Informal payments; OOP payments; SHI.