David R. Hotchkiss¹, Paul Hutchinson, PhD², and Andres Berruti¹. (1) Department of International Health and Development, Tulane University, 1440 Canal Street, Suite 2200, New Orleans, LA 70012, 202 237-5605, hotchkis@tulane.edu, (2) School of Public Health and Tropical Medicine, Tulane University, 1440 Canal Street, Suite 2200, New Orleans, LA 70112

Like most former communist countries in Europe and Central Asia, Albania is currently considering a number of alternative health sector reform strategies to improve the availability, quality, and use of primary health care services. However, in order to assess the likely success of such reforms, more needs to be known about the current levels and distribution of household out-of-spending. The purpose of this paper is to use the 2002 Albania Baseline Health Survey, a survey of 2,000 households in Berat, Kucova, and Fier, to understand the magnitude and distribution of out-of-pocket payments for health care services and to identify the factors that operate at the household- and provider-levels that determine whether individuals pay for health care and how much is paid within the month prior to the survey. Of particular interest in the study is examining the extent to which households incur informal payments across a number of dimensions – including health insurance status, socio-economic status, type of service, and type of facility. The findings indicate that out-of-pocket payments are widespread and extensive within the study area, and that a substantial share of these payments appears to be informal payments. Informal payments appear to be particularly severe for inpatient care and in some instances, can be catastrophic, particularly for poor households. The policy implications of the findings on alternative health care financing reforms are discussed.

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