The World Bank

In this paper, we investigate the extent to which the health systems of the Western Balkans (i.e. of Albania, Bosnia and Herzegovina, Montenegro, Serbia and Kosovo) have succeeded in providing financial protection against adverse health events. We examine disparities in health status, healthcare utilization and out-of-pocket payments for healthcare (including informal payments), and explore the impact of healthcare expenditures on household economic status and poverty. Data are drawn from LSMS surveys and methodologies include (i) generating a descriptive assessment of health and healthcare disparities across socioeconomic groups, (ii) measuring the incidence and intensity of catastrophic healthcare payments, (iii) examining the effect of out-of-pocket payments on poverty headcount and poverty gap measures, and (iv) running sets of country-specific probit regressions to model the relationship between health status, healthcare utilization and poverty. On balance, we find that the impact of health expenditures on household economic wellbeing and poverty is most severe in Albania and Kosovo, while Montenegro’s health system seems more effective in providing financial protection. The authors wish to thank Ruslan Yemtsov and Rodica Cnobloch for their very helpful advice on the use of the LSMS data and poverty lines. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors and do not necessarily represent the views of their affiliations