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Original Research

Catastrophic Health Expenditure among Chronic Patients Attending Dessie Referral Hospital, Northeast Ethiopia

ORCID Icon, ORCID Icon, &
Pages 99-107 | Published online: 03 Feb 2021

Abstract

Background

Catastrophic health expenditure is health spending that is not covered by a health-care plan. These costs tend to escalate over time, due to chronic illnesses. Catastrophic health expenditure leads to decreased use of health services and poorer treatment outcomes. This study measured the extent of and factors associated with catastrophic health expenditure among chronically ill patients attending Dessie Referral Hospital in northeast Ethiopia.

Methods

An institution-based cross-sectional study design was used to quantify catastrophic health expenditure among 302 chronically ill patients from May 25, 2018 to June 30, 2018. A stratified sampling technique was used to select the study participants. Descriptive and inferential statistics were computed using SPSS 20.

Results

Catastrophic health expenditure was found in 194 (64.2%, 95% CI 58.8%–70.5%) of chronic patients. Costly service (151, 50%), transport (104, 34.4%), and pharmaceuticals (189, 62.6%) were the reasons for catastrophic health expenditure among chronic patients. Factors associated with catastrophic health expenditure were age <30 years (AOR 7.74, CI 0.94–63.62; P=0.01), patient monthly income <Br1,068 (AOR 203.47, CI 34.72–41.70; P=0), being single (, AOR 0.2, CI 0.02–1.4; P=0.04), familymonthly income <Br1,068 (AOR 0.02, CI 0–0.47; P=0), laboratory examinations (, AOR 1.54, CI 0.23–10.41; P=0.04), and transport, food, and lodging (AOR 0.05, CI 0.00–0.52; P=0.01).

Conclusion

Two-thirds of chronic patients had catastrophic health expenditure. Starting and strengthening various health-insurance schemes will make chronic-care services more accessible and affordable.

Background

Catastrophic health expenditure is health spending that is not covered by a health-care plan, neither private health insurance nor a public health scheme.Citation1 If the financing of health care becomes more dependent on out-of-pocket payments, the burden imposed on those who use the services regularly is higher.Citation2

The proportion of households facing catastrophic health expenditure varies widely among countries.Citation3 One in six American families with disabled or elderly members experience high out-of-pocket health-care spending. These costs tend to escalate over time, due to chronic illnesses. For low-income families, 25% ospend >5% of their total household income on medical care services.Citation2 The proportion of Turkish households with catastrophic health expenditure was 0.6%, and average out-of-pocket health payments were US$7.36.Citation4

Private catastrophic health expenditure accounts for 20%–60% of national health expenditure in most low- and middle-income countries while in most developed economies it accounts for only 15%–25%.Citation5 In Bangladesh, the mean total of catastrophic health expenditure in 30 days was US$27.66 per capita, corresponding to 20.26% of monthly per capita gross domestic product during the fiscal year 2009–2010.Citation6 In India, the proportion of catastrophic health expenditure increased 2.24-fold between the years 1995–1996 (11.1%) and 2014 (24.9%).Citation7

In Nigeria, 16.4% of households incur catastrophic health expenditure at a 10% threshold of total consumption expenditure.Citation8 Catastrophic health expenditure drives 6% of Egyptian households to financial catastrophe.Citation9 Each year, Kenyan households spend over a tenth of their budget on health-care payments.Citation10 In most developing countries, the cost ofhealth expenditure is too high, and this tends to push a majority of the population who cannot afford it toward poverty.Citation1 Although access to appropriate and affordable health care is crucial to achieve better health outcomes in Africa, access to health care remains low, especially among the poor.Citation11

The level of disposable income earned by an individual or household and employment and education of an individual affect catastrophic health expenditure.Citation5 Patients with social health insurance in South KoreaCitation12 have catastrophic expenditure more than their counterparts. However, research done in NigeriaCitation13 and VietnamCitation14 showed that lack of health-insurance coverage was strongly associated with impoverishment. Households with increased family members with special diseases,Citation13 elderly people,Citation15 and geographic location of households are also potential determinants.Citation16

Prescription drugs constitute the biggest share of out-of-pocket payments in the US,Citation2 while medicine expenditure in low-income countries accounts for >57% of outpatient out-of-pocket costs at public facilities and over 45% of outpatient out-of-pocket costs at private facilities.Citation17 Those who lived in urban areas spend double the amount on medicine (US$24.06) of rural residents (US$12.68) in Bangladesh.Citation6 Transportcosts also amount to 12% of out-of-pocket treatment charges for outpatient services.Citation17

Out-of-pocket payments for health-care services lead to decreased use of health services and catastrophic health expenditure. Reducing incidence of household catastrophic health expenditure is one of the objectives of health policy. Knowing the incidence and determinants of catastrophic health expenditure is the basis for developing effective health policies to address this problem.Citation18 Therefore, this study measured the extentidentified determinants of catastrophic health expenditure among chronically ill patients attending in Dessie Referral Hospital, northeast Ethiopia.

Methods

Study Area and Period

This study was conducted in the town of Dessie, Amhara National Regional State, northeast Ethiopia from May 25, 2018 to June 30, 2018. Dessie is located 401 km from Addis Ababa. Dessie Referral Hospital is a large institution serving Dessie (219,978) and the surrounding population (7 million).

Study Design

An institution-based cross-sectional study design was used.

Study Population

Subjects were chronically ill patients attending regular follow-ups at chronic-care units of Dessie Referral Hospital.

Inclusion and Exclusion Criteria

Chronic patients attending regular follow-ups during the study period and willing to participate in the study aged ≥18 years were included. Chronic patients with communicable diseases receiving exempted services, seasonal cases, and hospitalized patients were excluded.

Dependent Variable

The dependent variable was catastrophic health expenditure. Measuring catastrophic health expenditure requires specification of the thresholds for household income or capacity to pay (nonfood expenditure), which household health expenditure should not exceed. Despite the two most commonly used measures being 10% of total household incomeCitation19 and 40% of household capacity to pay,Citation20 there is no consensus on these thresholds.Citation21,Citation22 Catastrophic health expenditure for chronic patients was estimated using household expenditure on chronic care >10% of total household income.

Independent Variables

The independent variables were sociodemographic (sex, age, marital status, residence, education, household composition), socioeconomic (occupationand household income), and reasons for catastrophic health expenditure (health-service expenditure, nonmedical expenses, and outpatient and inpatient services).

Sample-Size Determination and Sampling Procedure

The sample size was estimated by using a single population–proportion formula using 50% prevalence, 95% confidence level, and 5% tolerable sampling error. Since the source population was <10,000 (1,230 chronic cases), the sample size was adjusted to a total of 323 participants. Stratified sampling of patients (660 with diabetic mellitus and other hormonal problems, 300 cardiovascular system and chronic kidney problems, and 270 with central nervous system problems) followed by simple random sampling was used to select study participants. The response rate was 96.49%. As such, 162 with diabetic mellitus and other hormonal problems, with 74 cardiovascular system and chronic kidney problems, and 66 with central nervous system problems were included.

Data Collection and Quality Assurance

A structured interviewer-administered questionnaire was employed to collect patient data patients by two nurses who had no working relationship with the hospital after recruiting and half-day training with the supervision of the principal investigators. The questionnaire included sociodemographic characteristics (sex, age, marital status, residence, education, and household composition), household income, direct health-service expenditure, nonmedical expenses, and outpatient and inpatient services. Health spending were assessed for various items, including registration, drugs, consultations, and diagnostic purposes. Data were pretested in 5% of the sample size, checked for completeness, accuracy, and consistency immediately after collection, and confidentiality was maintained. The reliability of the questionnaire was also checked by Cronbach’s α (74%).

Data Management and Analysis

Data were entered and analyzed using SPSS 20. Variables with P<0.25 were transferred to multivariate logistic regression after binary logistic regression with 95% CIs. In logistic regression analyses, variables with P<0.05 were taken as statistically significant. Catastrophic health-expenditure estimation requires measuring the extent to which health costs exceed different thresholds of household income or consumption expenditure. To categorize medical expenditure, household income was calculated, and 10% was taken as the reference point. Those patients with health expenditure ≥10% of their household’s income were categorized as catastrophic.Citation19,Citation21,Citation23 Sensitivity analysis of the magnitude of catastrophic health expenditure was applied using different thresholds.

Operational Definitions

Chronic illness was taken as a long-term health condition that may not have a cure.

Catastrophic health expenditure was defined as the mean value by which out-of-pocket expenditure on the illness as a percentage of total household expenditure exceeded the 10% threshold.

Results

There were 174 (57.6%) male respondents aged 15–96 years (mean 46.05±15.59 years, ). Over a third (34.8%) were 31–44 years. A majority of respondents were married (52.3%) and urban dwellers (70.9%), and 21.9% were diploma holders.

Table 1 Sociodemographic characteristics of respondents (n=302)

Amost a third (31.1%) were private workers. Monthly incomes ranged from nil to Br9,000 birr a with mean of Br2,002.9±1718.35. With regard to family monthly income, income ranged Br400–10,000, with mean income of Br3,567.18±2,300.72 ().

Table 2 Socioeconomic characteristics of respondents (n=302)

Two-thirds (66.6%) of patients had comorbid conditions. Costly service and absence of health insurance were the reasons for catastrophic health expenditure for 151 (50%) and 65 (21.6%), respectively. Costs incurred for transport (104, 34.4%) and pharmaceuticals (189, 62.6%) were also reasons for catastrophic health expenditure. Catastrophic health expenditure was found in 194 (64.2%, 95% CI 58.8%–70.5%) patients (). The magnitude of catastrophic health expenditure at 5%, 15%, and 20% thresholds was also estimated and 267 (88.41%), 132 (43.7%), and 112 (37.1%) patients, respectively had catastrophic health expenditure.

Table 3 Factors involved in out-of-pocket expenditure among respondents (n=302)

Following univariate logistic regression analysis, sex, education, residence, and household numbers were not fitted to multivariate logistic regression analysis (P<0.25). Patients aged <30 years had 7.74 (AOR 7.74, 95% CI 0.94–63.62) times the health expenditureof those aged ≥64 years. Those whose monthly income was <Br1,068 were 203 times more likely (AOR 203.47, 95% CI 34.72–41.70) to have catastrophic health expenditure than those with monthly income >Br5,250. Single patients were 80% (AOR 0.2, 95% CI 0.02–1.4) less likely to have catastrophic health expenditure than divorced ones ().

Table 4 Sociodemographic and economic factors associated with catastrophic expenditure (n=302)

Patients who paid for laboratory examinations had 1.54 (AOR: 1.54, 95% CI 0.23–10.41)–fold the catastrophic health expenditure of patients who had a card. Patients who could afford transport, food, and lodging expenses were 95% (AOR 0.05, 95% CI 0.00–0.52) less likely to have catastrophic health expenditure than those with indirect medical costs ().

Table 5 Factors associated with catastrophic expenditure (n=302)

Discussion

Health spending measures the final consumption of health-care goods and services, including personal health care and collective services. The present study identified the extent and determinants of catastrophic health expenditure among chronically ill patients attending Dessie Referral Hospital in northeast Ethiopia. The prevalence of catastrophic health expenditure was 64.2% (95% CI 58.8%–70.5%). In Bangladesh, the mean total of catastrophic health expenditure in a month was United States dollar 27.66 which corresponds to 20.26% of the monthly per capita gross domestic product of the year 2009 to 2010.Citation6 Out-of-pocket payments are a common way of paying for health in developing countries.Citation24

The burden of noncommunicable diseases is growing. Chronic conditions require continuing care and health services that may impose a regressive cost burden on households.Citation23 The burden is more pronounced for those whose health-care needs are higher and who use such services frequently.Citation2 Catastrophic health expenditure is where individuals and households pay for health care out of their own resources.Citation25 It becomes catastrophic when out-of-pocket payments for health services consume a large portion of available income.Citation26 These payments have differentimpacts on health outcomes, health-service utilization, and financial security.Citation24

The present study found that those age <30 years were 7.74 times as likely (AOR 7.74, CI 0.94–63.62) to have catastrophic health expenditure as those aged >64 years. This finding was different from studies conducted in other countries. In the US, one in six households with elderly members experience high out-of-pocket health-care spending.Citation2 Elderly people spend 2–2.6-fold more on medication than their nonelderly counterparts in South Korea.Citation15 Although elderly patients with multiple morbid conditions are more vulnerable to polypharmacy, direct nonmedical costs are higher in younger age-groups. This could be an important reason for high catastrophic health expenditure.

Chronic patients with a monthly income <Br1,068 were 203.47 times as likely (AOR 203.47, CI 34.72–41.7) to have of catastrophic out-of-pocket medical expenditure as those earning >Br5,250 monthly. There is an increasing burden of medical expenses in South Korea, where families on the lowest incomes are 16.375 times more likely to experience catastrophic health expenditure.Citation27 This is in line with a study conducted in Bangladesh, where the lowest quintile of individuals spent 16.27% of their monthly household income,Citation6 while in Kenya, for every shilling increase in monthly household income, catastrophic health expenditure rises by 0.25 shillings on average.Citation5

Numerous studies have examined the relationship between household income and extent of catastrophic health expenditure for health care, and there is no clear-cut relationship, as the relationship varies from country to country.Citation16 In this study, those with monthly family income <Br1,068 were 98% less likely (AOR 0.02, CI 0–0.47) to have catastrophic health expenditure than those with monthly family income>Br5,250. However, the relationship between household size and catastrophic health expenditure was found to be statistically insignificant in this study. A case study in Kurdistan indicated that households that had multiple family members with special diseases were almost 5.5 times as likely to face catastrophic health expenditure as those with only one patient.Citation13 Families with members that have any health problem are also twice as likely to spend a high portion of their income on health services.Citation5

Access to health care remains low among the poor of Africa.Citation11 Affordability and accessibility determine health-service utilization in Africa. These people abstain from using essential health services, due to the increasing demand for health expenditure.Citation28 Expenditure becomes financially catastrophic when it endangers a family’s ability to maintain its standard of living.Citation24 In addition to financial shock, households are often faced with income loss if affected members are working adults.Citation26 As a result, many households are pushed into poverty due to catastrophic health expenditure.Citation29

In this study, patients’ education was not found to be significantly associated with catastrophic health expenditure. This contrasts with a study done in Kenya where for every incremental month of occupation duration, catastrophic health expenditure decreased by 705.574 shillings.Citation5 Better education has been found to increase the probability of earning more and the ability to acquire skills and knowledge to make informed choices on health-related matters. An educated household may make more effective use of modern medicine and is less likely to incur large expenditure. On the other hand, illiterate patients have weaker occupational and economic conditions, so they spend more of their money on health.Citation13

The residence of chronic patients had a statistically nonsignificant relationship with catastrophic health expenditure in this study. Urban patients spent more than twice as much money on medicine as rural residents in Bangladesh, and rural inhabitants with lower socioeconomic status had a greater burden of catastrophic health expenditure (18.25% of household income) than urban inhabitants (14.28%).Citation6 This is due to the fact that rural areas are far from cities. Unless things get complicated, most of the chronic rural patients seek services at nearby primary health–care units.

Single patients were 80% (AOR 0.2, 95% CI 0.02–1.4) less likely to have catastrophic health expenditure than divorced ones. A negative relationship between widowed patients and catastrophic health expenditure (AOR −0.29, CL−0.69 to 0.09) has been reported.Citation28 Marital status is one of the reasons for further exacerbation of chronic disease conditions. Married peoples tend to be physically and mentally healthier, due to increased social support. Divorce is associated with greater disruptive behavior, higher rates of depressed mood, lower self-esteem, and emotional distress. This is associated with negative health outcomes and accelerates medical expenditure.Citation30

Despite lack of health-insurance coverage being a nonsignificant determinant of impoverishment, 65 (21.6%) patients had catastrophic health expenditure due to the absence of health insurance. This is in line with findings from studies in VietnamCitation14 and NigeriaCitation5 that support the finding that lack of health insurance is strongly associated with impoverishment. Households in which patients do not have insurance are also 44% more likely to pay for catastrophic health expenditure than those with supplementary insurance.Citation13 On the other hand, people enrolled with social health insurance have more catastrophic health expenditure than thosenot covered by social health insurance in China.Citation12

Financial protection allows improving access to health-care services, regardless of patients’ ability to pay.Citation29 Households and individuals who pay out of pocket for health-care services are vulnerable to incur catastrophic health expenditure, which exacerbates their level of poverty.Citation14 The impact of health care–financing systems on the welfare of households is particularly important to reduce out-of-pocket payments and improve access to health-care services.Citation31

Direct medical costs were significantly (P=0.01) associated with catastrophic health expenditure in this study. Patients who had laboratory examinations had 1.54 (AOR 1.54, 95% CI 0.23–10.41)–fold the catastrophic health expenditure of patients who paid for physical examinations. For every shilling increase in household costs of medical services, catastrophic health expenditure reduces by 0.211 shillings in Kenya.Citation5 Depending on the type of chronic disease, medical costs differ in terms of amount and health outcome.Citation27 Medicines account for >57% of outpatient out-of-pocket expenses at public facilities and >45% of outpatient out-of-pocket expenses at private facilities.Citation17 In the US, 28% of low-income households spend >10% of their disposable income on health services,Citation2 and out-of-pocket payment for medical services is also very high in most developing countries.Citation18 Chronic conditions require lifelong medication, and hence out-of-pocket costs are burdensome and a cause of inadequate medication use, leading to medication nonadherence.Citation15

With regard to the relationship between indirect costs of medical services and catastrophic health expenditure, patients who had transport, food, and lodging expenses were 95% less likely (AOR 0.05, 95% CI 0–0.52) to have catastrophic health expenditure than those with any indirect medical costs. In low-income countries, catastrophic health expenditure for transport is 12% of treatment charges for outpatient services,Citation17 while the odds of food costs to result in catastrophic medical expenditure are 3.21 times less likely (AOR 3.21, CI 0.33–30.39) than absence of nonmedical costs. This is different from a study conducted in Kenya, where the odds of food costs to result in catastrophic medical expenditure were 0.069 times lower than absence of nonmedical costs.Citation5 Direct nonmedical costs are expenditure as the result of an illness, not involved in the direct purchasing of medical services. These may include such expenditure as travel, lodging, and home services.Citation32 Younger patients might prioritize quality of services and not worry about the cost.

Currently, chronic diseases are emerging in Ethiopia in both rural and urban dwellers. Each chronic disease has its own burden on patients’ monthly income, and this study highlighted the major determinants of catastrophic health expenditure for chronic diseases, assisting health policy–makers and health managers in prioritization of scarce health resources and designing interventions. However, the cross-sectional nature of this study might make it harder to establish a temporal relationship. Even though we minimized the estimation error by helping the patients in their recall efforts, the measures of annual household income relied on self-reported information. This may have introduced recall bias. The sample was restricted to patients who sought care in a designated hospital. However, many patients might not choose to seek care, due to perceived financial barriers. This probably led to underestimation of the incidence and affects the generalizability of the findings. Moreover, the sample analyzed in this study can only reflect part of health spending of households: it is possible that other family members utilized health services in other hospitals.

Conclusion

Two-thirds of chronic patients had catastrophic health expenditure. Factors associated with catastrophic health expenditure were age <30 years, monthly patient income <Br1,068, being single, monthly family income <Br1,068, laboratory examinations, and transport, food, and lodging expenses of the patient. The government should start to strengthen various health-insurance schemes to make chronic care services more accessible and affordable.

Data Sharing Statement

The data sets are available from the corresponding author upon reasonable request.

Ethics Consideration

Ethics approval was obtained from the ethics review committee of the College of Medicine and Health Sciences, Wollo University (WU Phar/220/09). Informed consent was obtained from study participants, and confidentiality was maintained. Verbal informed consent was approved by the ethics review committee, and this study was conducted in accordance with the Declaration of Helsinki.

Author Contributions

All authors made a significant contribution to the work reported, whether in the conception, study design, execution, acquisition of data, data analysis and interpretation, or in all these areas, took part in drafting, revising, or critically reviewing the article, gave final approval to the version to be published, have agreed on the journal to which the article has been submitted, and agree to be accountable for all aspects of the work.

Acknowledgment

The authors would like to acknowledge the Department of Pharmacy, College of Medicine and Health Sciences, Wollo University.

Disclosure

The authors declare that they have no potential conflicts of interest for this work.

Additional information

Funding

There is no funding to report.

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