Health care in Brazil is financed from many sources-taxes on income, real property, sales of goods and services, and financial transactions; private insurance purchased by households and firms; and out-of-pocket payments by households. Data on household budgets and tax revenues allow the burden of each source except firms' insurance purchases for their employees to be allocated across deciles of adjusted per capita household income, indicating the progressivity or regressivity of each kind of payment. Overall, financing is approximately neutral, with progressive public finance offsetting regressive payments. This last form of finance pushes some households into poverty. [Health Affairs 26, no. 4 (2007): 1017-1028 10.1377/hlthaff.26.4.1017 T o a s s e s s b r a z i l i an h e a lt h s ys t e m f i nan c i n g from an equity perspective, this paper analyzes the burden of health-sector financing (by source of financing) across income deciles of the population, as well as the impact of one source of health financing on income distribution and the degree of progressivity of health financing. We base our notion of equitable health-sector financing on the idea of progressivity, where the burden of financing is inversely related to individual income.
1
The Structure Of Health Financing In BrazilSince the 1970s, a large private hospital sector and substantial private health insurance have arisen in Brazil. The current Brazilian public-sector health system was introduced under the new Federal Constitution (1988), which, inspired by the idea of a national health system, created the Sistema Único de Saúde (SUS, or Unified Health System), whose principles are free and universal access to health care, comprehensiveness, and public financing. The SUS functions across Brazil's three levels of government (central, state, and municipality).Brazil's constitution allows the existence of a private sector in health, so the Brazilian health system is composed of a mix of the public system and the private sector. The function of private health insurance is called "duplicative" by the Organization for Economic Cooperation and Development (OECD) because the services covered are basically the same services that the SUS provides.2 In practice, the statutory system is the public one, and the private sector, which comprises both private voluntary health insurance and private providers, operates alongside the public system. In the private sector, people pay private providers using private health insurance or out-of-pocket payments. Because Brazilian income is concentrated, high-income populations purchase private health insurance more than do those in lower income groups.3 Exhibits 1 and 2 show the composition of financing in the Brazilian health sector. The main source of financing is taxes, which support public spending (44 percent of total health spending). One-third (34 percent) of total health spending is out of pocket; spending for private health insurance accounts for 22 percent. The central government finances most public-...