Financial Hardship and Health Borrowing in Central and Eastern Europe: Evidence from the Global Findex Database

Financial protection against healthcare costs is a defining objective of modern health systems, yet EU member states deliver it unevenly, particularly across the post-transition economies of Central and Eastern Europe (CEE). This study asks whether the persistent CEE-Western Europe gap in health borrowing reflects a fixed regional characteristic or is mediated by identifiable institutional factors. The analysis draws on Global Findex Database (World Bank) microdata from 2014, 2017, and 2021, combined with IMF COFOG fiscal indicators, WHO out-of-pocket expenditure data, and Worldwide Governance Indicators for 22 European countries (66 country-wave observations). Pooled OLS models with HC3 robust standard errors are estimated using four progressive specifications. Descriptive results confirm a persistent gap: the unweighted CEE mean borrowing rate reached 5.99% versus 3.60% in Western Europe (t = 3.10, p = 0.003), with Romania recording 12.53% in 2021 and an income-based inequality gap of 6.63 percentage points. In regression analysis, out-of-pocket payment shares are positively associated with borrowing (β = 0.11, p = 0.082), while government effectiveness shows the expected negative association (β = −1.60, p = 0.192). The CEE structural dummy, significant in the baseline model (p < 0.001), loses significance once governance quality enters the specification (R² rises from 0.247 to 0.370), indicating that the regional divide is substantially mediated by institutional quality rather than geography per se. These findings suggest that reducing household financial hardship requires not merely higher public spending, but targeted reforms in allocative efficiency, informal payment control, and governance capacity.