Determinants and impact of household's out-of-pocket healthcare expenditure in Sudan: evidence from urban and rural population^*

* The contents and recommendations do not necessarily reflect ERF's views.

ABSTRACT

This paper examines the determinants of the out-of-pocket health expenditure and catastrophic health spending incurred by Sudanese households. It also investigates the effect of out-of-pocket health expenditure on poverty incidence among households. The study uses 2009s National Baseline Household Survey (NBHS) data. The results show that factors such as household’s income, educational achievement of household’s head, household size, number of household’s members over 65 years old are the most important factors influencing out-of-pocket health expenditure. The results also indicate that the presence of elderly and children among the household’s members increases the risk of incurring catastrophic health expenditure. Moreover, the empirical results document that out-of-pocket health expenditure pushes a considerable portion of Sudanese households into poverty. Finally, the paper ends with some recommendations that aim to assist policymakers in designing an appropriate health financing strategy to protect households against the risk of out-of-pocket health expenditure and to reduce its impoverishment impact.

KEYWORDS:

• Out-of-pocket health expenditure
• chatastrophic health expenditure
• poverty
• Sudan

Acknowledgements

We wish to express our deep appreciation and gratitude to the Economic Research Forum (ERF) for the financial support to carry out this research. We are solely responsible for any shortcomings of this study as well as the views expressed in it.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

* The contents and recommendations do not necessarily reflect ERF's views.

1 Out-of-pocket expenditure is any direct outlay by households, including gratuities and in-kind payments, to health practitioners and suppliers of pharmaceuticals, therapeutic appliances, and other goods and services whose primary intent is to contribute to the restoration or enhancement of the health status of individuals or population groups. It is a part of private health expenditure (World Bank, 2014).

2 We test all the models for multicollinerity problem using variance inflation factor (VIF). The mean of the VIF is found to be close to unity in all models, indicating that no multicollinerity problem.

3 According to NBHS survey, the costs of transportations to health facilities were not included in the health expenditures undertaken by households. However, the distance to health centers is likely to have an indirect impact on these health expenditures. That is the far distance entails high costs of transportations and, therefore, it may enforce household who experience illness to postpone or delay admission to health facilities. In the end, admitting late to health facilities is likely to aggravate illnesses being suffered by household’s member(s) pushing it undertake higher OOPHE. Thus, this likely correlation justifies the inclusion of distance variable on the right hand side of Equation (1).

4 We estimated the CATHE’ model for 10 and 20% thresholds and the results replicate the findings of 40% threshold model.