Impoverishing effects of catastrophic health out-of-pocket payments in Nigeria
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Feb 20, 2024
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Abstract
Out-of-Pocket (OOP) expenditure on healthcare is a major share of total healthcare expenditure in many developing countries, including Nigeria. Households in different income groups in Nigeria spent a larger share of income mainly on consumption and basic needs, hence, OOP expenditure for health constituted a burden with attendant effects on household well-being. Catastrophic headcount and Overshoot mean positive gap and concentration indexes were used to capture the incidence and severity of catastrophic health expenditure. The poverty headcount, poverty gap, normalized poverty gap, and its mean estimate were used to empirically identify the effect of catastrophic health expenditure using the national poverty line of ₦137,430 per year. Data on 22,110 households with non-zero expenditure were obtained from the 2018/2019 Nigeria Living Standard Survey. The incidence and severity of catastrophic health expenditure were higher for poorest and poor income quintiles using total consumption expenditure and total non-food expenditure at various catastrophic thresholds. The results indicated that about one million Nigerians were pushed into poverty due to OOP expenditure. Widening the coverage of the available social health insurance and implementation of alternative means of healthcare financing would minimize the financial burden on many poorest and poor households.
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Keywords
Income groupsOut-of-pockettotal consumption expenditurenon-food expenditurethreshold
References
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• Nigeria Living Standard Survey (NLSS) (2018/2019) National Bureau of Statistics (NBS), Abuja Nigeria. Retrieved from http://microdata.worldbank.org/index,php.
• Onoka, C., Onwujekwe K. and Uzochukwu B. (2010). Measuring catastrophic health care expenditure in Nigeria: Implication for financial risk. The Consortium for Research on Equitable Health Systems research, UK.
• Saksena, P., Xu K. and Carrin G. (2006). The Impact of universal insurance program on catastrophic health expenditure: Simulation analysis for Kenya. The World Bank, Geneva.
• Sene, M. and Cissé, M. (2015). Catastrophic out-of-pocket payments for health and poverty nexus: Evidence from Senegal. International Journal of Health Economics Management, 15, 307-328.
• Somkotra, T. and Lagrada, L. (2008). Payments for health care and its effect on catastrophe and impoverishment: Experience from the transition to Universal Coverage in Thailand. Journal of Social Science and Medicine, 67, 2027-2035.
• Thakur, R., Sangar, R., Ram, B . and Faizan, M. (2018). Quantifying the burden of out-of-pocket health expenditure in India. Journal of Public Health, 159, 4 – 7.
• Van Doorslaer, E. Owen O’Donnell, Ravi P. and Aparnaa, S. (2005). Paying Out-of-Pocket for health care in Asia: Catastrophic and poverty impact. Health Econ., 16 (11), 59-84.
• Wagstaff, A. and Van Doorslaer, E. (2003). Catastrophe and Impoverishment in Paying for Health Care: With Applications to Vietnam 1993-98. Health Econ., 12, 921-934.
• Wang H., Torres L. and Travis P. (2018). Financial protection analysis in eight countries in the WHO South-East Asia Region. Bull World Health Organ, 96, 610–620.
• Worldometer (2021). Nigeria Population (LIVE). Retrieved from www.worldometers.info/world-population/nigeria-population/
• Xu, K., Evans, D., Kawabata, K., Zeramdini, R., Klavus, J. and Murray C. (2003). Understanding Household Catastrophic Health Expenditures: a Multi-country Analysis. The Lancet, 362, 111-17.
• Xu, K. (2005). Distribution of health payments and catastrophic expenditures methodology. A discussion Paper prepared for the World Health Organization.
• Olaide Sekinat Opeloyeru earned her Ph.D. from the University of Ibadan with sponsorship from the African Economic Research Consortium (AERC). Currently she is a Lecturer I at Tai Solarin University of Education, specializing in health economics and international economics. Her role is teaching at undergraduate and postgraduate levels, providing students with valuable insights into these dynamic fields.
• Amakom, U. and Ezenekwe, U. (2012). Implications of Households Catastrophic Out of Pocket Healthcare Spending in Nigeria. Journal of Research in Economics and International Finance (JREIF), 1(5), 136-140.
• Aregbeshola B. (2016). Out-of-pocket payments in Nigeria. Lancet, 387, 2506. Doi: 10.1016/so140-6736(30798-X
• Aregbeshola, B. and Khan, S. (2018). Out-of-pocket payments, catastrophic health expenditure and poverty among households in Nigeria 2010. International Journal of Health Policy Management, 7(9), 798–806.
• Arsenijevic, J., Pavlova, M. and Groot, W. (2012). Measuring the catastrophic and impoverishing effect of household health care spending in Serbia. Journal of Social Science and Medicine, 78, 17-25.
• Ataguba, J. (2012). Reassessing catastrophic health care payments with a Nigerian case study. Journal of Health Economics, Policy and Law, 7 (03), 309-326.
• Atake, E. and Amendah, D. (2018). Porous safety net: Catastrophic health expenditure and its determinants among insured households in Togo. BMC Health Services Research, 18 (175).
• Barasa E., Maina T. and Ravishankar N. (2017). Assessing the impoverishing effects and factors associated with the incidence of catastrophic health care payments in kenya. International Journal for Equity in Health, 16 (31).
• Berki, S. (1986). A look at catastrophic medical expenses and the poor. Health Affairs, 5(4), 138-145.
• Chantzaras, A. and Yfantopoulos, J. (2018). Financial protection of households against health shocks in Greece during the economic crisis. Social Science and Medicine, 6(24).
• Cleopatra, I and Eunice, K. (2018). Household catastrophic health expenditure: evidence from Nigeria. Microeconomics and Macroeconomics, 6 (1), 1-8.
• Demsy, T., Takim, A., Ishor D. and Abari, C. (2013). Inequality and class difference in access to healthcare in Nigeria. Research on Humanities and Social Sciences, 16(3), 45-51.
• Dorjdagva, J., Enkhjargal, B., Mikael S., Bayarsaikhan D. and Jussi K. (2016). Catastrophic health expenditure and impoverishment in Mongolia. International Journal for Equity in Health, 15 (105).
• Edeh, H. (2022). Exploring dynamics in catastrophic health care expenditure in Nigeria. Health Economics Review, 12 (22).
• Garcia-Diaz, R., and Sosa-Rub, S. (2011). Analysis of the distributional impact of out-of-pocket health payments: Evidence from a public health insurance program for the poor in Mexico. Journal of Health Economics, 30, 707–718.
• Garg, C., and Karan, A. (2005). Health and Millennium Development Goal 1: Reducing out-of-pocket expenditures to reduce income poverty - Evidence from India. EQUITAP Project, Working Paper 15.
• Ghosh, S. (2011). Catastrophic Payments and Impoverishment due to Out-of-Pocket Health Spending. Economic and political Weekly (EPW), 46 (47), 63-70.
• Gupta, I. (2009). Out-of-pocket expenditures and poverty: Estimates from NSS 61st Round. Paper presented for consideration of the Expert Group on Poverty, Planning Commission
• Gupta, I. and Joe, W. (2013). Refining estimates of catastrophic healthcare expenditure: an application in the Indian context. International Journal of Health Care Finance Econonomics, 13, 157–172.
• Ichoku, E., Fonta, W. and Obina, O. (2009). ‘Incidence and intensity of catastrophic healthcare financing and impoverishment due to out-of-pocket payments in southeast Nigeria. Journal of Insurance and Risk Management, 4(4), 47-59.
• Keane, M. and Thakur R. (2018). Health Care Spending and Hidden Poverty in India. Research in Economics. doi: https://doi.org/10.1016/j.rie.2018.08.002.
• Kimani, D. and Maina T. (2015). Catastrophic Health Expenditures and Impoverishment in Kenya. Washington, DC: Futures Group, Health Policy Project.
• Koch, K., Camilo, C. and Andreas S. (2017). Out of Pocket expenditure and financial protection in the chilean health care system—A systematic review. Health Policy. http://dx.doi.org/10.1016/j.healthpol.2017.02.013
• Krutilova, V. and Yaya, S. (2012). Unexpected Impact of Changes in Out-of-Pocket Payments for Health Care on Czech Household Budgets. Journal of Health Policy, 107, 276–288.
• Kwesiga B. (2012). Financial Protection in Uganda’s Health System: Catastrophic and Impoverishment Effects of Out-of-Pocket Health Care Payments. Health Economics Unit, School of Public Health and Family Medicine University of Cape Town, South Africa.
• Li, Y., Wu, Q., Liu, C., Kang, Z., Xin X., Hui Y., Mingli, J., Liu, G., Hao, J. and Ning, N. (2014). Catastrophic health expenditure and rural household impoverishment in China: What role does the new cooperative health insurance scheme play? PLoS ONE 9 (4).
• Mahumud, A., Sarker, A., Sultana, M., Islam, Z., Khan, J. and Morton, A. (2017). Distribution and determinants of out-of-pocket healthcare expenditures in Bangladesh. Journal of Preventive Medicine and Public Health, 50, 91-99.
• Mchenga, M., Chijere, C. and Chiwaula, S. (2017). Impoverishing effects of catastrophic health expenditures in Malawi. International Journal for Equity in Health, 16 (25).
• Nigeria Living Standard Survey (NLSS) (2018/2019) National Bureau of Statistics (NBS), Abuja Nigeria. Retrieved from http://microdata.worldbank.org/index,php.
• Onoka, C., Onwujekwe K. and Uzochukwu B. (2010). Measuring catastrophic health care expenditure in Nigeria: Implication for financial risk. The Consortium for Research on Equitable Health Systems research, UK.
• Saksena, P., Xu K. and Carrin G. (2006). The Impact of universal insurance program on catastrophic health expenditure: Simulation analysis for Kenya. The World Bank, Geneva.
• Sene, M. and Cissé, M. (2015). Catastrophic out-of-pocket payments for health and poverty nexus: Evidence from Senegal. International Journal of Health Economics Management, 15, 307-328.
• Somkotra, T. and Lagrada, L. (2008). Payments for health care and its effect on catastrophe and impoverishment: Experience from the transition to Universal Coverage in Thailand. Journal of Social Science and Medicine, 67, 2027-2035.
• Thakur, R., Sangar, R., Ram, B . and Faizan, M. (2018). Quantifying the burden of out-of-pocket health expenditure in India. Journal of Public Health, 159, 4 – 7.
• Van Doorslaer, E. Owen O’Donnell, Ravi P. and Aparnaa, S. (2005). Paying Out-of-Pocket for health care in Asia: Catastrophic and poverty impact. Health Econ., 16 (11), 59-84.
• Wagstaff, A. and Van Doorslaer, E. (2003). Catastrophe and Impoverishment in Paying for Health Care: With Applications to Vietnam 1993-98. Health Econ., 12, 921-934.
• Wang H., Torres L. and Travis P. (2018). Financial protection analysis in eight countries in the WHO South-East Asia Region. Bull World Health Organ, 96, 610–620.
• Worldometer (2021). Nigeria Population (LIVE). Retrieved from www.worldometers.info/world-population/nigeria-population/
• Xu, K., Evans, D., Kawabata, K., Zeramdini, R., Klavus, J. and Murray C. (2003). Understanding Household Catastrophic Health Expenditures: a Multi-country Analysis. The Lancet, 362, 111-17.
• Xu, K. (2005). Distribution of health payments and catastrophic expenditures methodology. A discussion Paper prepared for the World Health Organization.
• Olaide Sekinat Opeloyeru earned her Ph.D. from the University of Ibadan with sponsorship from the African Economic Research Consortium (AERC). Currently she is a Lecturer I at Tai Solarin University of Education, specializing in health economics and international economics. Her role is teaching at undergraduate and postgraduate levels, providing students with valuable insights into these dynamic fields.
How to Cite
Opeloyeru, Olaide Sekinat. 2024. “Impoverishing Effects of Catastrophic Health Out-of-Pocket Payments in Nigeria”. Studies in Business and Economics 27 (1):44-70. https://doi.org/10.29117/sbe.2024.0148.
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