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Disease-Specific Impoverishment Impact of Out-of-Pocket Payments for Health Care: Evidence from Rural Bangladesh

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Abstract

Background

Analysing disease-specific impoverishment impact of out-of-pocket (OOP) payments for health care is crucial for priority setting in any informed policy discussion. Lack of evidence, particularly in the Bangladesh context, motivates our paper.

Objective

To examine disease-specific impoverishment impact of OOP payments for health care.

Methods

The paper estimates the poverty impact of OOP payments by comparing the difference between the average level of headcount poverty and poverty gap with and without health care payments. We used primary data drawn from 3,941 households, distributed over 120 villages of seven districts in Bangladesh during August–September 2009.

Findings

We find that OOP outlays annually push 3.4 % households into poverty. The corresponding figures for those who had non-communicable diseases (NCDs), chronic illness, hospitalization and catastrophic illness were 4.61, 4.65, 14.53 and 17.33 %, respectively. Note that NCDs are the principal reason behind the latter two situations (about 88 % and 85 % of cases, respectively). Looking into individual categories of NCDs we found that major contribution to headcount impoverishment arose out of illnesses such as cholecystectomy, mental disorder, kidney disease, cancer and appendectomy. The intensity of impoverishment is the largest among the hospitalized patients, and more individually among cancer patients.

Conclusions

The poverty impact of OOP outlays for health care, in general, is quite high. However, it is especially high for NCDs, particularly for chronic NCDs and those requiring immediate surgical procedures. Hence, these illnesses should be given more priority for policy framing. In addition to suggesting some ex-ante measures (e.g. raising awareness regarding the risk factors causing NCDs), the paper argues for reforms to enhance efficiency in the public health care facilities and increasing the quality of public health care.

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Notes

  1. Of course the choice of the coping strategy also has implications on poverty outcome [7].

  2. In most cases the programme area included a part of the adjacent administrative unions in addition to the core union where the health care centre of the Grameen Kalyan was situated. On the other hand, as control, we selected one administrative union comparable to the core union of the programme area. Hence, the number of villages was higher in programme areas compared with control areas. As we sampled the same proportion of villages from both programme and control areas, some difference is inevitable.

  3. We used both WHO fact sheets and Council for Medical Schemes guidelines to define chronic diseases.

  4. Headcount poverty measures the percentage of individuals or households living below the poverty line, while poverty gap measures poverty deepening or intensity of poverty (the amount by which the poor households fall short of the poverty line).

  5. We used both food and non-food expenditure as a proxy for household income. For measuring food expenditure, we considered expenditure on the food bundle consumed by the household for the week preceding the survey. We considered expenditure for non-food consumption against the following items: clothing, toiletries, cookware, blankets, furniture, lamp, torch light, candle, match, kerosene, electricity, transportation, fuel, maintenance and repair of household effects, taxes, donation and tolls, recreation, tobacco, tuition fees, stationeries, mobile and land telephone bills, festivals and traditional ceremonies, electronic equipments and health expenses (both direct and indirect). Note that we included health expenses (both direct and indirect) for prepayment poverty measurement, and excluded direct health expenses for the postpayment measurement.

  6. The prepayment health care financing (insurance) mechanism does not usually cover expenses such as transportation cost, and cost of food, lodging, accommodation and unofficial fees. In order to link policy discussion with the insurance mechanism we did not include such expenses. Thus, we have meant ‘direct out-of-pocket payments’ as OOP payments in the remaining part of the paper.

  7. OOP payments and OOP costs on account of drugs for all episodes of illnesses over 12 months, when averaged over all sampled households, decline to US$52.74 and US$31.49, respectively (not shown in the table).

  8. The actual number of households experiencing catastrophic healthcare expenditure at the 10 % level comes to 404, which is about 10 % of the sample figure (i.e. 3,937), but when expressed as a share of all households who actually sought medical treatment for illness (i.e. 3,419), the ratio rises to about 12 %.

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Acknowledgments

The authors are grateful to the Department for International Development’s (UKAid) PROSPER (‘Promoting Financial Services for Poverty Reduction Programme’) project for providing funds for the longitudinal study “Microinsurance, Poverty & Vulnerability” housed at the Institute of Microfinance (InM). However, any opinions expressed and policy suggestions proposed in the document are the authors’ own and do not necessarily reflect the views of either InM or that of the funding agency. There are no conflicts of interest between the authors. The authors acknowledge Shubhasish Barua, Chowdhury Abdullah Al Asif, Rifat Haider, Suvadra Gupta, Raysul Naim and Shahidul Islam for valuable research and logistical assistance. The authors also acknowledge the anonymous reviewers and the Editor-in-Chief for their valuable comments and suggestions. The authors are also grateful to GK for its kind cooperation with this research.

Author contributions

Syed Abdul Hamid provided significant input (including conceptualization, sketching out overall structure, data analysis and write up) to prepare the primary draft and all subsequent drafts of the manuscript. He is the guarantor for the overall content.

Syed M. Ahsan provided substantial input for improving the analysis in all aspects, beginning with conceptualization.

Afroza Begum provided substantial input for data analysis, literature review and in drafting the manuscript.

Author information

Authors and Affiliations

  1. University of Dhaka, Dhaka, Bangladesh

    Syed Abdul Hamid

  2. Concordia University, Montreal, QC, Canada

    Syed M. Ahsan

  3. South Asian University, New Delhi, India

    Syed M. Ahsan

  4. CESifo, Munich, Germany

    Syed M. Ahsan

  5. University of Chittagong, Chittagong, Bangladesh

    Afroza Begum

Authors
  1. Syed Abdul Hamid
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  2. Syed M. Ahsan
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Corresponding author

Correspondence to Syed Abdul Hamid.

Additional information

This paper was drafted while Syed M. Ahsan was working as the Team Leader, Syed Abdul Hamid as the Project Coordinator and Afroza Begum as a Research Associate at the Institute of Microfinance (InM), Dhaka, Bangladesh.

Appendix

Appendix

See Table 5 and Fig. 2.

Fig. 2
figure 2

A schematic view of self-reported illnesses. CDs communicable diseases, NCD non-communicable diseases

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Hamid, S.A., Ahsan, S.M. & Begum, A. Disease-Specific Impoverishment Impact of Out-of-Pocket Payments for Health Care: Evidence from Rural Bangladesh. Appl Health Econ Health Policy 12, 421–433 (2014). https://doi.org/10.1007/s40258-014-0100-2

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