A consistent decomposition of the redistributive, vertical, and horizontal effects of health care finance by factor components

Abstract

In studies on the redistributive, vertical, and horizontal effects of health carefinancing, the sum of the contributionscalculated for eachfinancial instrument does not equal the total effects. As a consequence, thefinal calculations tend tobe overestimated or underestimated. The solution proposed here involves the adaptation of the Shapley value toachieve additive results for all the effects and reveals the relative contributions of different instruments to the change ofwhole-system equity. An understanding of this change would help policy makers attain equitable health carefinancing.We test the method with the publicfinance and private payments of health care systems in Denmark and the Netherlands.