Systematic Review of Factors Associated With Willingness to Pay for Health Financing Scheme

Background

Achieving universal health coverage (UHC) is a central goal of health systems worldwide, and particularly pressing in low- and middle-income countries (LMICs) where out-of-pocket expenditure remains the dominant form of health financing. Understanding individuals’ and households’ willingness to pay (WTP) for health insurance and financing schemes is critical for designing sustainable health financing policies. WTP measures provide insight into the premium levels that populations can afford and are willing to contribute, helping policy makers set contribution rates that balance financial sustainability with equity.

This systematic review, published in the Malaysian Journal of Public Health Medicine, synthesised the available evidence on factors associated with WTP for health financing schemes. The review is particularly relevant to Malaysia, which has been exploring the transition from a predominantly tax-funded healthcare system to one that incorporates social health insurance elements through a proposed National Health Financing Scheme.

Key Factors Influencing WTP

Income and Economic Status

Income level emerged as the most consistent positive predictor of WTP across the reviewed studies. Higher-income households were more willing and able to contribute to health insurance premiums. This finding has important equity implications: purely voluntary, premium-based health insurance schemes risk excluding the poorest households, who stand to benefit most from financial risk protection. The evidence suggests that in LMICs, governments should not rely solely on household premium contributions as a major financing source for universal health coverage.

Demographic Factors

Age showed a consistently negative relationship with WTP — older individuals were generally less willing to pay for health insurance, possibly reflecting fixed-income constraints among retirees and concerns about the value proposition of insurance at advanced ages. Education level, conversely, was positively associated with WTP, likely mediated through both higher income and better understanding of insurance concepts and benefits. Gender effects were mixed across studies, with some finding higher WTP among women (possibly reflecting their role as primary healthcare decision-makers for families) and others showing no significant gender difference.

Health Experience and Awareness

Previous experience with illness — particularly hospitalisations or catastrophic health expenditures — was a significant positive predictor of WTP. Individuals who had personally experienced the financial burden of healthcare costs were more motivated to invest in risk protection mechanisms. Similarly, awareness of health insurance benefits and understanding of how insurance pools risk were associated with higher WTP. These findings support the case for health literacy campaigns as a complement to health financing reforms.

Relevance to Malaysia

Malaysia’s healthcare system is at a crossroads. The country’s tax-based public healthcare system has achieved broad coverage, but faces growing fiscal pressure from an ageing population, rising chronic disease prevalence, and escalating healthcare costs. A study of 774 Malaysian households found that 87.5% were willing to contribute 0.5–1% of their salaries to a proposed National Health Financing Scheme, and 76.6% would contribute 1–2% to access both public and private healthcare services.

The systematic review’s findings suggest that Malaysia’s transition to a contributory financing model could be successful, given the relatively high education levels and health literacy in the population. However, careful attention must be paid to ensuring that contribution rates are progressive and that subsidies protect vulnerable groups, including the elderly, the unemployed, and informal sector workers.

Limitations

Systematic reviews of WTP studies face inherent challenges including the heterogeneity of contingent valuation methods, cultural differences in how populations conceptualise insurance and risk, and the gap between stated WTP and actual payment behaviour. Many included studies used hypothetical scenarios rather than real payment decisions, which may overestimate WTP. Cross-cultural comparisons are further complicated by differences in existing healthcare infrastructure and baseline out-of-pocket expenditure levels.

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