Latin American countries have long struggled with socioeconomic inequalities and health equity. In 2007, Ecuador implemented a health reform to address these issues by making public health services free, coordinating finances between subsystems and increasing the state’s health budget. This study evaluates whether Ecuador’s health system reform (2007–2017) reduced out-of-pocket (OOP) health spending, catastrophic health spending (CHS) and socioeconomic inequalities in CHS.

Cross-sectional study.

Secondary data available of households from the 2006 and 2014 National Living Standards Measurement surveys.

Descriptive statistics (means and medians) and log-binomial regression were applied to assess prevalence of OOP and socioeconomic inequalities (residence, region, health insurance status and wealth) in catastrophic health expenditure (CHE) for each period and over time.

Overall, there was a significant reduction of 14% points in the proportion of households with OOP healthcare expenditure. The prevalence of CHE decreased from 17% to 10% and within each socioeconomic group over time. Significant reductions in relative risk were observed in all socioeconomic variables. The inequality in CHE decreased significantly in households placed in rural areas (relative difference (RD): 0.88; 95% CI: 0.79 to 0.97) and poorest (RD: 0.82; 95% CI: 0.69 to 0.97); however, it increased within regions (RD: 0.58; 95% CI: 0.44 to 0.76) and for uninsured households (RD: 1.39; 95% CI: 0.95 to 2.04).

This study suggests that recent health reform effectively reduced OOP healthcare expenditure, CHE and some socioeconomic inequalities. Future reforms should further invest in key areas, expand health insurance for the most disadvantaged and monitor progress towards universal health coverage to address persistent inequalities.