Introduction

Health systems are not just about improving health. Good ones also ensure that people are protected from the financial consequences of illness and death, or at least from the financial consequences associated with the use of medical care. Anecdotal evidence suggests that health systems often perform badly in this respect, with devastating consequences especially for poor and near-poor households. The World Bank participatory poverty study in fifty countries – Voices of the Poor (Narayan et al. 2000a) – found that poor health and illness are universally dreaded as a source of destitution, not only because of the costs of health care but also because of the income lost. The study documents the case of a twenty-six year-old Vietnamese man who was the richest man in his community but became one of the poorest as a result of the health-care costs incurred for his daughter's severe illness (Narayan 2000). Another case concerned a thirty year-old Indian mother of four who was forced to sell the family's home and land and must walk 10 km a day transporting wood on her head in order to finance the cost of her diabetic husband's medical care (Narayan 2000).

How can a health system's success in protecting people against the financial consequences of ill health be measured? What do successful systems have in common? How far do health system reforms improve people's financial protection against health expenses?