Households Study on Out-of-Pocket Health Expenditures in Pakistan

Mahmood Khalid and Abdul Sattar

Abstract

Public Health expenditure to GDP ratio has remained low in developing countries and general public has no choice but to seek healthcare from their own pocket, which has remained the dominant source of financing. In Pakistan, out of pocket expenditures are around 70% of the total health expenditures. The study analyzed the out of pocket health expenditure patterns of Pakistan historically, across provinces, rural and urban areas. Further it compares between below poverty line and above poverty line households with reference to out of pocket health expenditures to analyze the potential of catastrophic health expenditures pushing marginalized group into a poverty trap. The study found that absolute amount of health expenditure by private households and government are increasing over the time, but the health related spending shares of household incomes are declining, which should be a major policy concern. The study further shows that in rural areas lack of health facilities pushes people to spend more to buy health care privately indicating health services inequality. Finally the lack of health facilities and improper medical facilities may be a significant factor for high disease prevalence rates and health problems in these areas. This further reinforces the people to spend more even for the minimum health care, which if catastrophic can push people into poverty.