Financial Risk in a Health System: The Impact of Direct Out-of-Pocket Spending on Households in Uganda

Posted: 28 Jun 2013

See all articles by Brendan Kwesiga

Brendan Kwesiga

HealthNet Consult

John Ele-Ojo Ataguba

University of Cape Town (UCT)

Charlotte Muheki Zikusooka

HealthNet Consult

Date Written: November 27, 2012

Abstract

Out-of-pocket payments for healthcare not only limit access to healthcare but also negatively affect household welfare. It has been argued that assessment of health system performance with regards to protecting households from financial risk due to out-of-pocket payments should not only address equity concerns that arise with regards to quantifying financial risk but should also identify households that are most vulnerable to that risk. This study assesses the extent and intensity of financial risk due to out-of-pocket payments in Uganda and also identifies households that are most vulnerable to that risk.

Results indicate that households in Uganda generally lack financial protection. For instance, 22.8% of all households spend over 10% of their total household consumption expenditure paying out-of-pocket for health care. The mean excess payment above the 10% threshold for those that exceed it is equal to 11% of that threshold. Furthermore, 4.3% Ugandans are impoverished due to out-of-pocket health payments representing a 17.6% rise in poverty headcount (from 24.5% to 28.7%). Households with a member aged above 65 years or a member aged below five years were found to have a higher likelihood of incurring both catastrophic payments and impoverishment. While the utilisation of both public and private health facilities were both associated with a high likelihood of financial risk, this risk was higher among households that used private facilities.

There is a need for concerted efforts aimed at reducing the level of out-of-pocket payments for health care in Uganda. This is achievable by adopting mandatory prepayment mechanism to finance health care. Initiatives for reducing out-of-pocket payments should target the most vulnerable households as identified in the study.

Keywords: financial risk, out-of-pocket, impoverishment, catastrophic payments

Suggested Citation

Kwesiga, Brendan and Ataguba, John Ele-Ojo and Muheki Zikusooka, Charlotte, Financial Risk in a Health System: The Impact of Direct Out-of-Pocket Spending on Households in Uganda (November 27, 2012). Available at SSRN: https://ssrn.com/abstract=2285998 or http://dx.doi.org/10.2139/ssrn.2285998

Brendan Kwesiga (Contact Author)

HealthNet Consult ( email )

Plot 8, Corporation Road
Minister's Village
Kampala, Kampala
Uganda

John Ele-Ojo Ataguba

University of Cape Town (UCT) ( email )

Private Bag X3
Rondebosch, Western Cape 7701
South Africa

Charlotte Muheki Zikusooka

HealthNet Consult ( email )

Uganda
+256 712 116 050 (Phone)

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