Financial hardship and out-of-pocket expenditure

Where health systems fail to provide adequate financial protection, people may not have enough money to pay for health care or meet other basic needs. As a result, lack of financial protection can reduce access to health care, undermine health status, deepen poverty and exacerbate health and socio-economic inequalities. On average across EU member states, around a fifth of all spending on health care comes directly from patients through out-of-pocket (OOP) payments (see indicator “Financing of health expenditure” in Chapter 5). People experience financial hardship when the burden of such OOP payments is large in relation to their ability to pay. Poor households and those who have to pay for long-term treatment such as medicines for chronic illness are particularly vulnerable.

The share of household consumption spent on health care provides an aggregate assessment of the financial burden of OOP expenditure. Across EU member states, about 3% of total household spending was on health care goods and services, ranging from 2% or less in France, Luxembourg, Slovenia, Romania and Croatia to more than 7% in Malta (Figure 7.5). The share is also relatively high in Switzerland (6%).

Health systems in EU countries differ in the degree of coverage for different health goods and services (see indicator “Extent of health care coverage”). Household spending on pharmaceuticals and other medical goods was the main health care expense for people, followed by spending on outpatient care (Figure 7.6). These two components typically account for almost two-thirds of household spending on health care. Household spending on dental care and long-term health care can also be high, averaging 13% and 11% of OOP spending on health respectively, followed by spending on inpatient care (10%).

The indicator most widely used to measure financial hardship associated with OOP payments for households is the incidence of catastrophic spending on health (Cylus et al., 2018). This varies considerably across European countries, from fewer than 2% of households experiencing catastrophic health spending in France, Sweden, the United Kingdom, Ireland, the Czech Republic and Slovenia, to over 8% of households in Portugal, Poland, Greece and Hungary. In Latvia, Lithuania and Bulgaria, the proportion is even higher, reaching 15% or more (Figure 7.7). Across all countries, poorer households (i.e. those in the bottom consumption quintile) are most likely to experience catastrophic health spending, despite the fact that many countries have put in place policies to safeguard financial protection.

Countries with comparatively high levels of public spending on health and low levels of OOP payments typically have a lower incidence of catastrophic spending. However, policy choices are also important, particularly around coverage policy (WHO Regional Office for Europe, 2019). Population entitlement to publicly financed health care is a prerequisite for financial protection, but not a guarantee of it. Countries with a low incidence of catastrophic spending on health are also more likely to exempt poor people and frequent users of care from co-payments; use low fixed co-payments instead of percentage co-payments, particularly for outpatient medicines; and cap the co-payments a household has to pay over a given time period (e.g. Austria, Czech Republic, Ireland and the United Kingdom).


Cylus, J., Thomson, S., Evetovits, T. (2018), Catastrophic health spending in Europe: equity and policy implications of different calculation methods, Bulletin of the World Health Organization (96).

WHO Regional Office for Europe (2019), Can people afford to pay for health care? New evidence on financial protection in Europe, Copenhagen.

Metadata, Legal and Rights

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Extracts from publications may be subject to additional disclaimers, which are set out in the complete version of the publication, available at the link provided.

© OECD/European Union 2020

The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at