This week a student and I published an article in PLOS ONE examining the relationship between healthcare-related expenditure and financial catastrophe in Bangladesh. Because PLOS ONE is an open access journal it is possible to read the entire article free online, here. Our study was a statistical analysis of data from a probability-sampled survey of households in Rajshahi, an urban area in Northwest Bangladesh. We collected data on their self-reported illness, household consumption and healthcare-related payments, and used it to estimate the prevalence and risks of financial catastrophe.

Bangladesh doesn’t really have any effective risk-pooling mechanisms, and a large portion of all health financing is derived from direct payments by individuals, usually referred to as out-of-pocket (OOP) payments. The lack of risk-pooling mechanisms mean that households with limited savings are at risk of financial catastrophe from unexpected healthcare costs, and may have to use a wide range of quite unpleasant coping mechanisms to deal with the costs. Our research project aimed to identify the drivers of costs, factors associated with financial catastrophe, and the coping mechanisms used to deal with high costs.

These kinds of research projects have a lot of challenges, and are necessarily flawed as a result. In low-income nations like Bangladesh it is difficult to assess wealth directly, since households often obtain income in kind or through bartering or intensive production (family gardens, etc); and often official income is not declared in order to avoid taxes or other costs. This is usually dealt with through assessing household consumption, rather than income, adjusting for fixed and productive assets. It’s also difficult to assess illness, which is usually done through self-report, and obviously also medical expenses can be hard to keep track of. There is an extensive body of literature on how to deal with those problems though, and we used mostly quite standard methods to handle them. Despite the obvious limitations in such a survey, I think this one presents fairly robust results.

We found a high prevalence of financial catastrophe, with an average of 11% of household consumption spent on healthcare and 9% of households facing financial catastrophe under our definition. Financial catastrophe was much more likely in the poorest households, even though these households spent considerably less on healthcare, and financial catastrophe was also associated with inpatient service use. Chronic illness was associated with higher OOP payments. Bangladesh is currently passing through the “epidemiological transition,” in which chronic non-communicable disease (NCD) prevalence is rising, but infectious diseases remain a significant problem, so the finding that chronic illness is associated with increased OOP payments is concerning: with a baseline proportion of their income already consumed by such illnesses, households will be less able to adapt to unexpected sudden illness or injury, both of which are relatively common in low-income countries compared to high-income countries.

Our findings suggest that Bangladesh needs to move rapidly to implement and scale-up risk-pooling mechanisms; deal with problems in public facilities that mean they don’t seem to be protective against financial catastrophe even though they are ostensibly free or heavily-subsidized; and prioritize NCDs in its health policy agenda. We’re currently conducting more research on disease-specific costs, coping mechanisms, and other aspects of the health-financing challenges facing Bangladesh. Other countries in Asia are moving towards universal health coverage (UHC) and Bangladesh lags some of them; but with care, a little reform, and some coordinated action to target NCDs, there’s no reason that despite its poverty Bangladesh can’t follow in the footsteps of other countries like Vietnam in reducing risk of financial catastrophe and improving healthcare access for the poorest members of its population.

As an aside, 9% is a very high prevalence of financial catastrophe, but I’d be interested to see how it compared with the USA (which also doesn’t have widespread and effective risk-pooling mechanisms). I don’t think the research is done the same way for US systems as in low-income countries, but there appears to be some evidence that financial catastrophe can be high, at least amongst the poor. For example, this New England Journal of Medicine article suggests that Medicare provides limited protection against financial catastrophe, and shows figures indicating that 4% of recipients pay >$5,000 on medical expenses in any one year, which would probably qualify them for financial catastrophe (since most Medicare users have low incomes). I would be interested to see the rates of financial catastrophe amongst the uninsured in the USA, and to compare them before and after Obamacare is introduced, but I don’t think research on the topic is done in the same way in the high-income countries, so I doubt it will be possible. Although health insurance (private or public) is supposed to protect against unexpected medical expenses, it can still be ineffective, and furthermore access to health insurance enables people to purchase healthcare they might otherwise have neglected, which could put them at risk of financial catastrophe where the insurance system fails to provide adequate coverage. Obamacare is going to extend no-frills coverage to the currently uninsured, but this doesn’t mean they’ll get benefits sufficient to prevent financial catastrophe, so it will be interesting to see whether it meets both of the goals of a health-financing system (improving access and reducing financial risk), just one of them, or neither. And if it fails on either or both of those goals, does this mean that Bangladesh will achieve effective UHC before the USA? That would be interesting … but first Bangladesh needs to start the move toward UHC, and hopefully this research will provide useful information and a little impetus in support of that process …