Coping with out-of-pocket health payments: empirical evidence from 15 African countries

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Abstract

OBJECTIVE: To explore factors associated with household coping behaviours in the face of health expenditures in 15 African countries and provide evidence for policy-makers in designing financial health protection mechanisms. METHODS: A series of logit regressions were performed to explore factors correlating with a greater likelihood of selling assets, borrowing or both to finance health care. The average partial effects for different levels of spending on inpatient care were derived by computing the partial effects for each observation and taking the average across the sample. Data used in the analysis were from the 2002-2003 World Health Survey, which asked how households had financed out-of-pocket payments over the previous year. Households selling assets or borrowing money were compared to those that financed health care from income or savings. Those that used insurance were excluded. For the analysis, a value of 1 was assigned to selling assets or borrowing money and a value of 0 to other coping mechanisms. FINDINGS: Coping through borrowing and selling assets ranged from 23% of households in Zambia to 68% in Burkina Faso. In general, the highest income groups were less likely to borrow and sell assets, but coping mechanisms did not differ strongly among lower income quintiles. Households with higher inpatient expenses were significantly more likely to borrow and deplete assets compared to those financing outpatient care or routine medical expenses, except in Burkina Faso, Namibia and Swaziland. In eight countries, the coefficient on the highest quintile of inpatient spending had a P-value below 0.01. CONCLUSION: In most African countries, the health financing system is too weak to protect households from health shocks. Borrowing and selling assets to finance health care are common. Formal prepayment schemes could benefit many households, and an overall social protection network could help to mitigate the long-term effects of ill health on household well-being and support poverty reduction.

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Household catastrophic health expenditure: a multicountry analysis.

Christopher Murray, Lewis Evans, J Klavus … (2003)

Health policy makers have long been concerned with protecting people from the possibility that ill health will lead to catastrophic financial payments and subsequent impoverishment. Yet catastrophic expenditure is not rare. We investigated the extent of catastrophic health expenditure as a first step to developing appropriate policy responses. We used a cross-country analysis design. Data from household surveys in 59 countries were used to explore, by regression analysis, variables associated with catastrophic health expenditure. We defined expenditure as being catastrophic if a household's financial contributions to the health system exceed 40% of income remaining after subsistence needs have been met. The proportion of households facing catastrophic payments from out-of-pocket health expenses varied widely between countries. Catastrophic spending rates were highest in some countries in transition, and in certain Latin American countries. Three key preconditions for catastrophic payments were identified: the availability of health services requiring payment, low capacity to pay, and the lack of prepayment or health insurance. People, particularly in poor households, can be protected from catastrophic health expenditures by reducing a health system's reliance on out-of-pocket payments and providing more financial risk protection. Increase in the availability of health services is critical to improving health in poor countries, but this approach could raise the proportion of households facing catastrophic expenditure; risk protection policies would be especially important in this situation.

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What are the economic consequences for households of illness and of paying for health care in low- and middle-income country contexts?

Diane McIntyre, Michael Thiede, Göran Dahlgren … (2006)

This paper presents the findings of a critical review of studies carried out in low- and middle-income countries (LMICs) focusing on the economic consequences for households of illness and health care use. These include household level impacts of direct costs (medical treatment and related financial costs), indirect costs (productive time losses resulting from illness) and subsequent household responses. It highlights that health care financing strategies that place considerable emphasis on out-of-pocket payments can impoverish households. There is growing evidence of households being pushed into poverty or forced into deeper poverty when faced with substantial medical expenses, particularly when combined with a loss of household income due to ill-health. Health sector reforms in LMICs since the late 1980s have particularly focused on promoting user fees for public sector health services and increasing the role of the private for-profit sector in health care provision. This has increasingly placed the burden of paying for health care on individuals experiencing poor health. This trend seems to continue even though some countries and international organisations are considering a shift away from their previous pro-user fee agenda. Research into alternative health care financing strategies and related mechanisms for coping with the direct and indirect costs of illness is urgently required to inform the development of appropriate social policies to improve access to essential health services and break the vicious cycle between illness and poverty.