Household Healthcare Expenditure in Bangladesh : Analyses of Progressivity and Impacts on Poverty Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/m039k831r

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  • Health systems financing aims at providing adequate services, ensuring sufficient providers’ incentives, and protecting individuals and families from financial catastrophe. Health services are financed through government funding, taxation, out-of-pocket payments, insurance, donations and voluntary aid. Low- income countries mostly rely on out-of-pocket payments. In South East Asia region, the latter accounted for 84.0% of private expenditure on health, and over 60.0% of total health expenditure. Bangladesh health systems financing are characterized by high out-of-pocket payments (63.3%) that show an increasing trend, and a lack of prepayment mechanisms. We hypothesize that an inequity prevails, and that households face high catastrophic payments and poverty. Although, a limited number of studies exists on these issues, there were studies conducted in some pocket areas making it difficult to generalize. Thus, we aim to analyze the progressivity, incidence, and intensity of catastrophic payment and poverty using a nationally representative dataset. We use data from Bangladesh Household Income and Expenditure Survey, 2010. This is a cross sectional survey with a sample of 12,240 households consisting of 55,580 individuals. The ethical foundation of this research is based on the “ability to pay” principle, proposed by Adam Wagstaff (2002) and of John Rawls (1971) concept of distributive justice. For quantification of progressivity, we adopted the theoretical framework developed by O’Donnell, van Doorslaer, Wagstaff, and Lindelow (2008). The Kakwani index and the Gini coefficient are used to measure progressivity and redistributive effects respectively. We use Stata 14.0 and ADePT 5.0 software for data analysis. Our findings show that an inequality exists in health systems financing between the poor and the rich. All sources of healthcare financing are regressive in nature, meaning that health payments comprise a decreasing share of households’ income/consumption as it rises. The gross household consumption for the poorest quintile is 0.22 times the richest quintile. However, the healthcare financing share for the poorest is 0.56 times the richest. The differences between Gini coefficient and Kakwani index for all sources of finance are negative, indicating regressivity. Health financing is more concentrated among the poor. For the poorest quintile, post-payment disposable income is less than the pre-payment. However, it is opposite for the rich. Thus, income inequality increases among the quintiles. Both incidence and intensity of catastrophic payments vary from two to five times for the lowest and the highest quintiles respectively. In case of nonfood consumption, both incidence and intensity of catastrophic payments are much higher than gross consumption. Concentration indices are negative in all thresholds indicating that the poor mostly bear the burden. Both rank-weighted headcount and overshoot are higher for all threshold levels. We found that using the conventional poverty measure, 3.0% of the population is not counted as living in extreme poverty. Our findings substantially add evidence of health systems financing impact on inequitable financial burden of healthcare and disposable income. The heavy reliance on out-of-pocket payments affect household living standards. If the government and the people of Bangladesh are concerned about inequitable financing burden, our study suggests that Bangladesh needs to reform the health systems financing scheme. The poor households need protections from catastrophic health expenditures by reducing reliance on out-of-pocket payments. Risk protection policies including finding alternative sources of health systems financing is inevitable to overcome the present situation. We recommend longitudinal monitoring of progressivity and poverty status.
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