Despite improvements in many health indicators in the last few decades globally, providing access to affordable healthcare remains a considerable challenge in many low- and middle-income countries including Bangladesh. Bangladesh uses a combination of different healthcare financing strategies, including general revenue taxation, out-of-pocket payments, development partners’ contributions and others including insurance (MOHFW, 2015). Indeed, out-of-pocket (OOP) expenditure is one of the most noteworthy payment strategies for healthcare in Bangladesh, and the share of OOP expenditure has been increasing alarmingly from 55.9% in 1997 to 68.5% in 2015 (MOHFW, 2015). According to the World Bank, nearly 74% of healthcare costs in Bangladesh are paid directly by households, leading to significant financial strain on many families (World Bank, 2022). This high out-of-pocket expenditure often pushes households into poverty and limits access to necessary medical services. As a consequence, approximately 18% of the households face catastrophic health expenditures and almost 6.13 million people fall into poverty in 2022 (Sarker et al 2022).  Out-of-pocket (OOP) cost is defined as the monetary cost or expenses incurred by individuals or households at the time of receiving any healthcare services including the component of cost-sharing and informal payments (e.g., tips, under-the-table payments), but excluding the insurance premiums and any reimbursements from the third-party payers (e.g., health insurgence fund) (WHO, 2017). OOP cost includes any payment related to medical fees, purchases of medicines (whether prescribed or not), user fees for public care and payments for equipment and diagnostic tests. Households often manage to pay such excessive expenditures by borrowing from others, selling assets/mortgage, family savings, donation from relatives, bank loans and others. Due to the nature of pluralistic health system, households typically visit multiple providers for treatment care (Sarker et al., 2016, 2018). For accessing public health facilities, care seekers are often charged a small user fee, while relatively large out-of- pocket payments are required for accessing the healthcare services from any private providers, which are thus often inaccessible for people on low incomes.

The overall objective of this study is to capture the healthcare needs and inequality of out-of-pocket healthcare cost among Bangladeshi population.  This study able to assess how equitable a health financing system is, as it shows who pays for the health care and how the payment mechanisms are distributed across socio-economic strata or measure of ability to pay (ATP).

Specific objectives:

1) To assess the healthcare needs and how do these vary across urban and rural areas.

2) To assess the drivers and distribution of OOP healthcare cost in Bangladesh across urban and rural areas.

3) To identify the distribution of inequality of OOP health expenditures using decomposition analysis

4) To explore way-out from catastrophic OOP health cost and inequality in policy perspective in Bangladesh.

Study Director: Abdur Razzaque Sarker, Research Fellow, BIDS

Funding: REF, BIDS