Paying Out-of-Pocket for Health Care in Asia? Part 1

1. Introduction

I would like to share an interesting article entitled ‘Paying Out-of-Pocket for Health Care in Asia: Catastrophic and Poverty Impact” by World Bank in EQUITAP Project Report. It stated that Out-of-pocket (OOP) payments are the principal means of financing health care throughout much of Asia. OOP payments include fees, insurance co-payments, user charges for public care and purchases of medicines, appliances, diagnostic tests, etc.

This has consequences for the utilisation of health care and household living standards. Welfare is reduced by the uncertainty of medical expenditures. Some households may be able to borrow to cover unexpected medical bills but at the risk of being trapped in long-term debt while some may be able to finance medical expenses from savings, by selling assets or by cutting back on expendable items of consumption.

More severely economically constrained households may be forced to cut back on necessities and consequently pushed into, or further into, into poverty. Thus, illness then presents a difficult choice between diverting a large fraction of household resources to cover the costs of treatment and forgoing treatment at the expense of health.

In the report, they described the magnitude and distribution of OOP payments for health care in fourteen countries and territories accounting for 81% of the Asian population. They focused on expenditures that may be considered catastrophic, in the sense that they absorb a large fraction of household resources, and on the impoverishing effect of payments.

Catastrophic payments have been defined as those in excess of a substantial fraction of the household budget. Spending a large fraction of household resources on health care is disruptive to living standards.

On the other hand, impoverishment is examined by estimating the number of individuals that are pushed below the poverty line once OOP expenditures on health care are subtracted from household resources. In shorthand, we refer to this as the poverty impact of OOP payments.

Besides that, they analysed the data from national representative household expenditure surveys that record both OOP payments for health care and total household expenditure in detail and so offer accurate estimates of the magnitude of OOP payments relative to the household budget.

2. Out-of-pocket financing of health care in Asia

In the second section of the report, it stated that poorer countries rely more heavily on direct payments. The OOP contribution reaches three-quarters or more of TEH in Nepal, India and Vietnam. OOP financing has been reduced in Hong Kong, Malaysia and Thailand by greater reliance on taxation and in Taiwan and South Korea through the development of universal social insurance. In Bangladesh and Sri Lanka, only a tiny fraction of OOP payments are for care delivered in the public sector.

In Bangladesh, principally, medicines are for poor and civil servants but in practice most medicines must be purchased from drug outlets. On the other hand, Hong Kong and Malaysia charge inpatient and outpatient care in public sector at a very moderate level and with exemptions for the poor, civil servants and health service staff.

By contrast, payments for care received in the public sector account for around a quarter of total OOP payments in India and Indonesia and more than a third in Thailand and Vietnam and more than two-fifths in Kyrgyzstan.

Interestingly,there are no charges for vaccinations, immunisations and family planning services in Bangladesh, China, India, Malaysia, Nepal, Taiwan and Thailand. However, consultations with hospital specialists are free only in India and Kyrgyz.

I will share more about the report in Part 2. J Hope this link can help you understand more about the post:

Paying out-of-pocket for health care in Asia: Catastrophic and poverty impact