The impact of ill health on the poor
Household catastrophic health expenditure: a multi-country analysis
Using out-of-pocket payments to finance health systems can have catastrophic impacts on poor households
Authors:
Publisher:
The Lancet, 2003
This Lancet article investigates the extent of catastrophic health expenditure in 59 countries. It defines household expenditure as catastrophic if a household’s financial contributions to the health system exceed 40 per cent of their income remaining after subsistence needs have been met. The paper finds that payments from out-of-pocket health expenses varied widely between countries, from less than 0•01% in Czech Republic to 10•5% in Vietnam. Countries in transition and Latin America have higher rates of catastrophic spending. 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.
The paper concludes that people, particularly those 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. Other more complex strategies can reduce the financial consequences of payment for services such as progressive fee schedules, highly subsidised or free hospital services, and the provision of certain health services to the poor.
