Characterizing key misconceptions of equity in health financing for universal health coverage

Abstract

Fairness or equity in health financing is critical to ensuring universal health coverage (UHC). While equity in health financing is generally about financing health services according to ability-to-pay, misconceptions exist among policymakers, decision-makers and some researchers about what constitutes financing health services according to ability-to-pay or an equitably financed health system. This commentary characterizes three misconceptions of equitable health financing-(1) the misconception of fair contribution, (2) the pro-poor misconception and (3) the misconception of cross-subsidization. The paper also uses these misconceptions to clearly illustrate what constitutes equity in health financing, highlighting the importance of income distribution. The misconceptions come from the authors' extensive engagements with policymakers and practitioners, especially in Africa. A clear understanding of equity in health financing provides an avenue to significant progress towards UHC and improving a country's income distribution.