16 income so defined _net_ of out-of-pocket payments. For reasons indicated in section V, prepayment and postpayment income are both defined to be gross of food consumption-this enables us to see in the case of postpayment income what households have available to spend on food after paying for health services. Both prepayment and postpayment income are defined on a per capita basis. Out-of-pocket payments are derived in both years from two questions on health spending over the last 12 months, one specifically on hospital care, the other on all other goods and services associated with the treatment and diagnosis of illness and injury.

The WHO FFC index is computed on the same data to provide the comparison with the Aronson et al. approach. The FFC index is straightforward to compute. The Aronson et al. decomposition is more involved. _RE_ can be computed simply as the difference between _Gpre_ and _Gp,st._ In each case, the convenient covariance approach was used on household-level data [121. The out-of-pocket share g is computed simply as mean out-of-pocket payments divided by mean prepayment income. To compute K (or more precisely the concentration index for out-of-pocket payments, Cp) and _Cx p_ one has to decide on appropriate groups of prepayment equals.<sup>5</sup> In this illustration, prepayment equals were defined by expressing prepayment income as a multiple of the poverty lines derived by Glewwe, Gragnolati and Zaman [131. Households below the poverty line were divided into eight groups, the first comprising households with a prepayment income between 0% and 12.5% of the poverty line, the second comprising households with a prepayment income between 12.5% and 25% of the poverty line, and so on. Households with a prepayment income of between 100% and 200% of the poverty line were divided into just four groups, along similar lines, while those with prepayment incomes in excess of 200% of the poverty line were divided into just three groups. To put this into perspective, nearly 60% of households fell below the poverty line in 1993, and nearly 40% did in 1998. Obviously, other groupings of prepayment equals are possible. If this were intended as anything other than an illustration, one would want to assess the sensitivity of the results to alternative groupings, though it seems likely that in this case as in other cases where the Aronson et al. decomposition has been used, widening the bandwidth would be likely to reduce H, increase R, but probably leave their sum relatively unaffected. With groups of prepayment equals defined, it is straightforward to compute _Cp_ on the grouped data, and to form the ranking variable to compute _Cxp._ Using the former and _Gpre,_ one can compute K, and using the latter and _Gpost_ one can compute R. This leaves H, which can be computed as a residual.

# _RESULTS_

Using the definitions indicated above, the values of the WHO FFC index for out-ofpocket payments in Vietnam in 1993 and 1998 are 0.9557 and 0.9617 respectively (cf. Table 1). These are different from the number published in the WHR, in part because the FFC index here is computed only for out-of-pocket payments (the WHR claims to allocate health revenues from _all_ sources) and in part because food consumption has not been netted out from total consumption in this exercise for the reasons indicated above. The change in the FFC index suggests a move towards greater fairness in the out-of-pocket payment component of the

> 5 Recall that the Kakwani index in eqn (2) needs to be computed on the assumption that everyone at each level of prepayment income pays the same amount in health care. Hence the need for groups of prepayment equals even in the computation of _K._