Out of pocket health expenditures and determinants of distressed finance in Pakistan

In the absence of adequate public healthcare system, patients have to rely on private healthcare facilities that force them to bear heavy financial burden and increase their out of pocket health expenditure. Such outlays have serious consequences upon households’ budget; particularly poor people are adversely affected. Patients have to finance their healthcare requirements through selling assets and/ or borrowing money. This study aims to investigate the distressed finance faced by patients due to out of pocket health expenditures in Pakistan. Additionally, we identify the inequalities in and determinants of distressed finance among patients. The study uses primary data collected from three divisions of Punjab (Lahore, Rawalpindi and Sargodha) involving 200 respondents. Concentration curves and indices are used to identify the inequalities in distressed finance, while the modified Poisson regression is applied to find the determinants of distressed finance. Major determinants identified included households’ region, socioeconomic status, education, number of family members aged less than five and greater than sixty five years, number of earners and nature of disease of patients. The prevalence of distressed finance was found to be 61% among the respondents. Selling of assets was common among rural residents, whereas borrowing among urban ones as a source of distressed finance. Prevalence of distressed finance was more concentrated among the people with weak socioeconomic status. The findings suggest that public healthcare financing may be strengthened and insurance-like risk pooling mechanisms may be expanded, especially for deprived and vulnerable households in order to reduce the reliance on out-of-pocket payments. Moreover, policies related to financial protection should prioritize low-socioeconomic groups and rural population in order to prevent distress borrowing and asset depletion.