Charu C. Garg

Effect of payments for health care on poverty estimates in 11 countries in Asia: an analysis of household survey data.

BACKGROUND Conventional estimates of poverty do not take account of out-of-pocket payments to finance health care. We aimed to reassess measures of poverty in 11 low-to-middle income countries in Asia by calculating total household resources both with and without out-of-pocket payments for health care. METHODS We obtained data on payments for health care from nationally representative surveys, and subtracted these payments from total household resources. We then calculated the number of individuals with less than the internationally accepted threshold of absolute poverty (US1 dollar per head per day) after making health payments. We also assessed the effect of health-care payments on the poverty gap--the amount by which household resources fell short of the 1 dollar poverty line in these countries. FINDINGS Our estimate of the overall prevalence of absolute poverty in these countries was 14% higher than conventional estimates that do not take account of out-of-pocket payments for health care. We calculated that an additional 2.7% of the population under study (78 million people) ended up with less than 1 dollar per day after they had paid for health care. In Bangladesh, China, India, Nepal, and Vietnam, where more than 60% of health-care costs are paid out-of-pocket by households, our estimates of poverty were much higher than conventional figures, ranging from an additional 1.2% of the population in Vietnam to 3.8% in Bangladesh. INTERPRETATION Out-of-pocket health payments exacerbate poverty. Policies to reduce the number of Asians living on less than 1 dollar per day need to include measures to reduce such payments.

Who pays for health care in Asia

We estimate the distributional incidence of health care financing in 13 Asian territories that account for 55% of the Asian population. In all territories, higher-income households contribute more to the financing of health care. The better-off contribute more as a proportion of ability to pay in most low- and lower-middle-income territories. Health care financing is slightly regressive in three high-income economies with universal social insurance. Direct taxation is the most progressive source of finance and is most so in poorer economies. In universal systems, social insurance is proportional to regressive. In high-income economies, the out-of-pocket (OOP) payments are proportional or regressive while in low-income economies the better-off spend relatively more OOP. But in most low-/middle-income countries, the better-off not only pay more, they also get more health care.