||Syed Abdul Hamid1,3, Syed M. Ahsan2,3
||1Institute of Health Economics, University of Dhaka, Dhaka, Bangladesh, 2Department of Economics, Concordia University, Montreal, Canada, Canada, 3Institute of Microfinance (InM), Dhaka, Bangladesh
|1st country of focus:
|Relevant to the conference theme:
||Non-communicable chronic diseases
|Summary (max 100 words):
||This study measures the impact of out-of-pocket-payments for chronic illnesses in rural Bangladesh on impoverishment. We used the data from the baseline survey on about 4,000 households in the Microinsurance and Vulnerability project of the Institute of Microfinance. We estimated the impoverishment impact of OPP by comparing the difference between the average level of head count poverty or poverty gap before health care payments and after payments. The study finds that about 7.72 percent of those who had chronic illnesses fall into poverty after accounting for OPP payments. The study suggests that in when introducing health insurance, adopting proper measures for effective rationing of the prices of essential drugs and imposing restrictions on selling over the counter drugs needs to occur.
|Background (max 200 words):
||Over the last few decades the prevalence of chronic illnesses (e.g., diabetes, cancer, heart and kidney diseases) has increased both in the developed and developing countries. Enormous expenses are incurred for managing these diseases. In developing countries the major source of financing these expenses comes from out-of-pocket payments (OPP). OPP, the most inequitable and least efficient approach to health care financing, severely affects consumption of poor households during periods of major chronic illness and/or forces the poor to forego treatment, which raises the chance of long-term deterioration in health and earning capacity. OPP is therefore claimed to be a major cause of poverty in low-income countries. OPP is the single largest component of total health expenditure in Bangladesh. A significant part of this expenditure is incurred for chronic illnesses. This may play an important role in exacerbating poverty in rural Bangladesh. Reducing OPP, especially for chronic illnesses, is crucial for achieving universal health coverage as well as maintaing the success in poverty reduction measures adopted by Bangladesh. Thus, for policy discussion, it is crucial to expose the extent to which OPP affects poverty level. Although one study measured overall impoverishment impact of OPP in Bangladesh, there is no evidence on impoverishment impact of OPP incurred for chronic illness.
|Objectives (max 100 words):
||The primary purpose of the research is to expose the extent to which OPP incurred for chronic illnesses contributes to poverty. The specific objectives are: (i)to explore the overall impact of OPP on the incidence and depth of poverty; (ii) to examine the impoverishment impact of OPP incurred for chronic illnesses; and (iii) to examine the impoverishment impact of OPP incurred for acute illnesses.
|Methodology (max 400 words):
||This paper uses data from the baseline survey of a longitudinal study project entitled ‘Microinsurance and Vulnerability’ undertaken by Microinsurance Research Unit (MRU) of the Institute of Microfinance (InM). The survey subjects were 4,010 stratified randomly selected households from 120 villages of 7 districts in Bangladesh, which incorporated about 20,000 individuals. We asked about any acute or chronic condition suffered by any individual in the household during the 12 months preceding the interview. We used both WHO fact sheets and CMS guidelines to define chronic diseases. The information about OPP for consultations, drugs, diagnostic tests, surgical operations, bed charge, transports and others (food, lodging, unofficial fees, etc) for each episode of illness were asked. In addition to questions regarding illness and out-of-pocket payments, the questionnaire for the household survey included a detailed set of questions on household demographic conditions, occupations, education, income, expenditure and assets. We constructed the overall OPP of a household by adding the expenses incurred for consultations, drugs, diagnostic tests, surgical operations, bed charge, transports and food, lodging, unofficial fees, etc. for each episode of illness for the 12 months preceding the survey. OPP for chronic and acute illnesses was constructed by adding the expenses of the same categories incurred for each episode of illness of the respective condition for the 12 months preceding the survey. We have estimated head count poverty and depth of poverty using Cost of Basic Need approach (CBN). Like earlier studies, we have estimated the poverty impact of OPP by comparing the difference between the average level of head count poverty or poverty gap before health care payments and after payments. We used both food and non-food consumption as a proxy for household income. For measuring food consumption we considered the expenditure on all the food bundles consumed by the households for the week preceding the survey. For non-food consumption we considered expenditure against the following items: clothing, toiletries, cookware, blankets, furniture, lamp, torch light, candle, match, kerosene, electricity bill, transportation, recreation, tuition fees, stationeries, mobile and land telephone bills, festivals and traditional ceremonies and electronic equipments. To obtain per capita consumption the sum of food and non-food expenditure was divided by age and sex adjusted to household size.
|Results (max 400 words):
||About 88 percent households reported at least one episode of illness; and about 55 percent of them (or 48% of the sampled households) had more than one (about 35% had 2 episodes and about 20% had 3 or more) in one year. The survey covered 19,424 individuals of which about 33 percent had some sort of self-reported morbidity over the 12 months. About one-third of the ill persons suffered from general cough and fever. The other major symptoms were gastrointestinal disorder, pain, diarrhea, typhoid, headache, blood pressure, skin diseases and dysentery. About 20 percent of the cases were chronic and the remainder were acute. OPP per affected and sampled household from all episodes of illnesses during the 12 months preceding the survey stood at USD 68 and USD 59 respectively. Drug expenses are the major component accounting for about 53 percent of OPP. OPP is about 6 percent of the total consumption and about 9 percent of the food consumption. Although absolute OPP had a definite positive trend across the quintiles, there was no significant variation across the quintiles in its share against both total consumption and food consumption. OPP per episode of chronic condition (USD 86) is significantly (p-value < .01) higher than acute condition (USD 24). We find overall 4.14 percent individuals fall into poverty after accounting for OPP payments. The pre-payment head count is 38.81 percent and post-payment head count after deducting OPP payments from total consumption expenditure is 42.95 percent. The intensity of the poverty gap is 0.68. About 7.72 percent of those who had chronic illnesses fell into poverty after accounting for OPP payments (the pre-payment head count is 39.12 percent and post-payment head count after deducting OPP payments from total consumption expenditure is 46.84 percent) while the corresponding figure for acute illnesses is 3.44 percent (the pre-payment head count is 38.54 percent and post-payment head count after deducting OPP payments from total consumption expenditure is 41.98 percent). The intensity of poverty gap for chronic illnesses is more than double (1.13) compared to acute illnesses (0.55).
|Conclusion (max 400 words):
||The study finds OPP for chronic illnesses accounts for a significant percentage of individuals falling into poverty. This also has a large impact on deepening poverty. Thus, Bangladesh needs introducing some alternative ways to raise funds for provision of health care in the rural areas. As health insurance is an innovative way to raise funds for provision of health care and there is evidence that health insurance reduces the catastrophic payments, we suggest designing appropriate health insurance (e.g., micro health insurance) products for the rural population with the provision of a safety net for the poor. The high share of dru expenses in OPP also requires some policy measures concerned with drug price control. Compared to the neighbouring countries drug prices are quite high in Bangladesh. Although Bangladesh National Drug Policy aimed to ensure the rational pricing of essential drugs, it is evident that the regulatory authorities have little control over drug prices. There is also over use of drugs in Bangladesh. Evidence shows that at least half of the drugs are not prescribed, dispensed or sold appropriately. Self-medications and purchasing of all type of drugs without any prescription, and thousands of illegal and unlicensed drug stores, are the major reasons for over use of drugs. Thus, we also suggest the adoption of proper measures for effective rationing of the prices of essential drugs and imposing restrictions on selling over the counter drugs.