Financial hardship and out-of-pocket expenditure

Where health systems fail to provide adequate financial protection, people may suffer financial hardship from paying for health care, or they simply forgo health care altogether because they cannot afford it. 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 the EU, around 15% of all spending on health care comes directly from patients through out-of-pocket (OOP) payments. People experience financial hardship when the burden of OOP payments is large in relation to their ability to pay. Poorer households and those who have to pay for long-term treatment are particularly vulnerable.

The share of household consumption spent on health care provides an aggregate assessment of the financial burden of OOP expenditure. In 2020, around 3% of total household spending was on health care goods and services across the EU, ranging from less than 2% in Croatia, Luxembourg and Cyprus to more than 7% in Malta (Figure 7.7).

Health systems in EU countries differ in the degree of coverage for different health goods and services. Pharmaceuticals and other medical goods made up the main OOP expense for people in 2020, followed by spending on outpatient care (Figure 7.8). These two components typically account for two-thirds of household spending on health care.

The indicator most widely used to measure financial hardship associated with OOP payments for households is the incidence of catastrophic spending on health (Cylus, Thomson and Evetovits, 2018[1]). This varies considerably across EU countries, from fewer than 2% of households experiencing catastrophic health spending in Sweden, Spain, Ireland and Slovenia, to 15% of households or more in Latvia, Lithuania and Bulgaria (Figure 7.9). Across all countries, poorer households (those in the lowest consumption quintile) are most likely to experience catastrophic health spending.

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 Europe, 2019[2]). 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 limit the use of co-payments; exempt poor people and frequent users of care from co-payments; use low fixed co-payments instead of percentage co-payments; and cap the co-payments a household has to pay over a given time period (as, for example, in Austria, Germany, Ireland, Spain and the United Kingdom).


[1] Cylus, S. Thomson and T. Evetovits (2018), “Catastrophic health spending in Europe: equity and policy implications of different calculation methods”, Bulletin of the World Helath Organization, Vol. 96/9,

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

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