The impact of changes in private health expenditure on New Zealand households

The proportion of New Zealand's total health expenditure financed by the pu blic sector has fallen from 87% in 1983/84 to 77% in 1997/98 in real per ca pita terms. In the paper, we firstly describe changes in private health exp enditure in New Zealand and compare these changes with trends in private an d public health expenditure in a number of OECD countries. Secondly, we fin d that in New Zealand, there have been increases in both out-of-pocket paym ents and membership of private health insurance funds over the period from 1983/84 to 1997/98. We analyze the relationship between out-of-pocket expen diture, insurance expenditure, and household income across income deciles a nd across time. We find that out-of-pocket payments are regressive but the regressivity did decline in 1993/94 in response to a government initiative to improve the targeting of government subsidies towards lower income house holds. (C) 2001 Elsevier Science Ireland Ltd. All rights reserved.