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Financial Challenges of Health Care Reform in Nicaragua

Author: JOAN COSTA-FONT, MONTSE COSTA, ROSA RODRIGUEZ-MONGUIO, JOAN ROVIRA, and PETER SANIDFORD
Published in IJED, Vol. 6 No. 4

One of the main challenges in the implementation of health care reform in developing countries has been the development of catastrophic insurance schemes. However, there is no evidence that this feature is socially desirable and whether it is feasible given the unavoidably ‘normative’ definition of catastrophic risk. This papers aims at contributing to the examination of the content, measurement and policy implications of health care reform tackling catastrophic risks. We undertake a theoretical and empirical analysis on the magnitude of catastrophic expenditures drawing upon data from Nicaragua and we use indirect measurement techniques as well as direct revelation methods. Our literature review leads us to conclude that there is no single meaning catastrophic risk insurance. Our empirical analysis indicates that indirect measures of estimating the exposure to catastrophic risks are highly dependent on restrictions associated with the measurement of wealth and income, while direct measurement approaches might underestimate the magnitude of such risks. Finally, the paper reveals significant differences between total versus drug-related catastrophic expenditures.

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