Out-of-Pocket Health Expenditure and Debt in Poor Households: Evidence from Cambodia

Department of Public Health, Institute of Tropical Medicine, Antwerp, Belgium.
Tropical Medicine & International Health (Impact Factor: 2.33). 03/2004; 9(2):273-80. DOI: 10.1046/j.1365-3156.2003.01194.x
Source: PubMed


To document how out-of-pocket health expenditure can lead to debt in a poor rural area in Cambodia.
After a dengue epidemic, 72 households with a dengue patient were interviewed to document health-seeking behaviour, out-of-pocket expenditure, and how they financed such expenditure. One year later, a follow-up visit investigated how the 26 households with an initial debt had coped with it.
The amount of out-of-pocket health expenditure depended mostly on where households sought care. Those who had used exclusively private providers paid on average US dollars 103; those who combined private and public providers paid US dollars 32, and those who used only the public hospital US dollars 8. The households used a combination of savings, selling consumables, selling assets and borrowing money to finance this expenditure. One year later, most families with initial debts had been unable to settle these debts, and continued to pay high interest rates (range between 2.5 and 15% per month). Several households had to sell their land.
In Cambodia, even relatively modest out-of-pocket health expenditure frequently causes indebtedness and can lead to poverty. A credible and accessible public health system is needed to prevent catastrophic health expenditure, and to allow for other strategies, such as safety nets for the poor, to be fully effective.

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    • "Case studies suggest that, prior to the introduction of HEFs, fees deterred utilisation by the poor (Jacobs and Price, 2004) and that OOP payments were a major cause of impoverishment and indebtedness (Van Damme et al., 2004). "
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    ABSTRACT: Public providers have no financial incentive to respect their legal obligation to exempt the poor from user fees. Health Equity Funds (HEFs) aim to make exemptions effective by giving NGOs responsibility for assessing eligibility and compensating providers for lost revenue. We use the geographic spread of HEFs over time in Cambodia to identify their impact on out-of-pocket (OOP) payments. Among households with some OOP payment, HEFs reduce the amount paid by 35%, on average. The effect is larger for households that are poorer and mainly use public health care. Reimbursement of providers through a government operated scheme also reduces household OOP payments but the effect is not as well targeted on the poor. Both compensation models raise household non-medical consumption but have no impact on health-related debt. HEFs reduce the probability of primarily seeking care in the private sector.
    Full-text · Article · Oct 2013 · Journal of Health Economics
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    • "Several studies have shown that use of private providers is associated with higher OOP payments. Van Damme et al., in their study on OOP expenditure on health in Cambodia, found that those who sought care in the private sector exclusively spent close to three times more that those who went to public providers [22]. Similarly, Manzi et al. found that those who visited private non-governmental facilities paid about 30 times more than those seeking care at government facilities [23]. "
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    ABSTRACT: Background: The objectives of this study were to assess the patterns of treatment seeking behaviour for children under five with malaria; and to examine the statistical relationship between out-of-pocket expenditure (OOP) on malaria treatment for under-fives and source of treatment, place of residence, education and wealth characteristics of Uganda households. OOP expenditure on health care is now a development concern due to its negative effect on households' ability to finance consumption of other basic needs. Methods: The 2009 Uganda Malaria Indicator Survey was the source of data on treatment seeking behaviour for under-five children with malaria, and patterns and levels of OOP expenditure for malaria treatment. Binomial logit and Log-lin regression models were estimated. In logit model the dependent variable was a dummy (1=incurred some OOP, 0=none incurred) and independent variables were wealth quintiles, rural versus urban, place of treatment, education level, sub-region, and normal duty disruption. The dependent variable in Log-lin model was natural logarithm of OOP and the independent variables were the same as mentioned above. Results: Five key descriptive analysis findings emerge. First, malaria is quite prevalent at 44.7% among children below the age of five. Second, a significant proportion seeks treatment (81.8%). Third, private providers are the preferred option for the under-fives for the treatment of malaria. Fourth, the majority pay about 70.9% for either consultation, medicines, transport or hospitalization but the biggest percent of those who pay, do so for medicines (54.0%). Fifth, hospitalization is the most expensive at an average expenditure of US$7.6 per child, even though only 2.9% of those that seek treatment are hospitalized.The binomial logit model slope coefficients for the variables richest wealth quintile, Private facility as first source of treatment, and sub-regions Central 2, East central, Mid-eastern, Mid-western, and Normal duties disrupted were positive and statistically significant at 99% level of confidence. On the other hand, the Log-lin model slope coefficients for Traditional healer, Sought treatment from one source, Primary educational level, North East, Mid Northern and West Nile variables had a negative sign and were statistically significant at 95% level of confidence. Conclusion: The fact that OOP expenditure is still prevalent and private provider is the preferred choice, increasing public provision may not be the sole answer. Plans to improve malaria treatment should explicitly incorporate efforts to protect households from high OOP expenditures. This calls for provision of subsidies to enable the private sector to reduce prices, regulation of prices of malaria medicines, and reduction/removal of import duties on such medicines.
    Full-text · Article · May 2013 · Malaria Journal
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    • "For example, in East Asia, the inability to repay loans can lead to debt bondage, literally enslaving people [17]. Van Damme et al. [18] followed up people who had borrowed to pay costs associated with treatment of dengue in Cambodia and found that 62% of them were still paying off their debt and its interests after one year. Other studies in Cambodia showed that costs related to illness are a major cause of sale of land to repay illness-related debts. "
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    ABSTRACT: Background Borrowing money is a common strategy to cope with health care costs. The impact of borrowing on households can be severe, leading to indebtedness and further impoverishment. However, the available literature on borrowing practices for health is limited. We explore borrowing practices for paying for health care by the poor in Cambodia and provide a typology, associated conditions, and the extent of the phenomenon. Methods In addition to a semi-structured literature review, in-depth interviews were conducted with representatives of 47 households with health-related debt and 19 managers of formal or informal credit schemes. Results A large proportion of Cambodians, especially the poor, resort to borrowing to meet the cost of health care. Because of limited cash flow and access to formal creditors, the majority take out loans with high interest rates from informal money lenders. The most common type of informal credit is locally known as Changkar and consists of five kinds of loans: short-term loans, medium-term loans, seasonal loans, loans for an unspecified period, and loans with repayment in labour, each with different lending and repayment conditions and interest rates. Conclusion This study suggests the importance of informal credit for coping with the cost of treatment and its potentially negative impact on the livelihood of Cambodian people. We provide directions for further studies on financial protection interventions to mitigate harmful borrowing practices to pay for health care in Cambodia.
    Full-text · Article · Nov 2012 · BMC Health Services Research
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