Health systems provide adequate financial protection when payments for healthcare do not expose people to financial hardship. A lack of financial protection can reduce access to healthcare, undermine health status, deepen poverty, and exacerbate health and socio‑economic inequalities. Exposure to financial hardship for people using health services can also lead to catastrophic health spending, with poorer households and those who must pay for long-term treatment – such as medicines for chronic illness – particularly vulnerable. Financial protection is weakened by a health system’s reliance on out-of-pocket (OOP) payments for healthcare. On average across EU countries, 15% of all spending on healthcare comes directly from patients through OOP payments (see section on “Health expenditure by type of financing” in Chapter 5).
The share of household consumption spent on healthcare provides an aggregate assessment of the financial burden of OOP payments. In 2022, around 3% of total household spending was on health services across the EU. This share ranged from less than 2% in Luxembourg and Croatia to 5% in Portugal and nearly 8% in Malta (Figure 7.6).
Health systems in EU countries differ in the degree of coverage for different health services (see section on “Extent of healthcare coverage”). Pharmaceuticals and other medical goods are the main driver of household spending in the EU, accounting for 44% of OOP spending on health on average in 2022 (Figure 7.7). In Bulgaria, Romania, Poland and the Slovak Republic, pharmaceuticals accounted for over 60% of OOP spending. Outpatient care accounted for just over a fifth of household spending on healthcare on average, but was especially high in Portugal (52%), Italy (47%) and Ireland (40%), where cost-sharing arrangements for outpatient care are common. Dental care represented 14% of OOP spending on health, and long-term care made up 11% in 2022. Inpatient care played only a minor role (9%) in the composition of OOP spending in EU countries, except for in Greece (32%) and Belgium (27%).
The indicator most widely used to measure financial hardship associated with OOP payments for households is the incidence of catastrophic health spending (Cylus, Thomson and Evetovits, 2018[1]). This varies considerably across EU countries, from fewer than 2% of households experiencing catastrophic health spending in Sweden, Ireland, Slovenia and the Netherlands, to 15% of households or more in Latvia, Lithuania and Bulgaria (Figure 7.8) (UHC watch, 2024[2]). 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 (WHO Europe, 2023[3]).
However, policy choices are also important, particularly around coverage policy (WHO Europe, 2023[3]). Population entitlement to publicly financed healthcare is a prerequisite for financial protection, but not a guarantee of it. Countries with a low incidence of catastrophic spending on health are more likely to limit the use of co-payments, for example through exemptions for people with low incomes and frequent users of care from co-payments, using low fixed co-payments instead of percentage co-payments, and placing caps on the co-payments a household has to pay over a given time period (for example in Austria, Belgium, Germany, Ireland, Spain and the United Kingdom).
