Abstract
Out-of-pocket payments are the primary source through which health expenditure is met in Senegal. However, these payments are financial burdens that lead to impoverishment when they become catastrophic. The purpose of this study is to cast light on the determinants of catastrophic household out-of-pocket health expenditures and to assess their implications on poverty. The 2011 poverty monitoring survey is used in this study. This survey aims to draw poverty profiles and to highlight the socio-economic characteristics of different social groups. In line with the concerns raised by the new Supplemental Poverty Measure, poverty statistics are adjusted to take into account household health expenditures and to estimate their impoverishing effects. To identify the determinants of the magnitude of catastrophic health expenditure, we implement a seemingly unrelated equations system of Tobit regressions to take into account censoring through a conditional mixed-process estimator procedure. We identify major causes of catastrophic expenditures, such as the level of overall health spending, the expensiveness of health goods and services, the characteristics of health facilities, the health stock shocks, the lack of insurance, etc. Results show evidence that catastrophic health expenditures jeopardize household welfare for some people that fall into poverty as a result of negative effects on disposable income and disruption of the material living standards of households. Our findings warrant further policy improvements to minimize the financial risks of out-of-pocket health expenditures and increase the efficiency of health care system for more effective poverty reduction strategies.
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Notes
In April 2001, heads of state of African Union countries met and pledged to set a target of allocating at least 15 % of their annual budget to improve the health sector (United Nations 2001).
SPM incorporates additional items such as tax payments and work expenses in its family resource estimates (Short 2013).
On May 23, 2014, 479.576 CFA Franc (African Financial Community) = US$1 (OANDA 2014). This is the currency used in West Africa.
The remote areas of these southern regions might be affected by the geographical imbalance of health workers and insufficient health facilities with the Casamance crisis (Separatist rebels of MFDC have been fighting for independence for the province of Casamance since 1982, despite peace agreements signed in 2004).
10 % of total household income. This experiment parameter is the most common threshold in the literature (Pradhan and Prescott 2002; Wagstaff and van Doorslaer 2003; Russell 2004), with the rationale that this represents an approximate threshold at which the household is forced to sacrifice other basic needs, sell productive assets, incur debt, or become impoverished (Russell 2004).
\(\hbox {C}=\frac{2}{H\mu }{\sum }_{i=1}^H h_i r_i -1-\frac{1}{H}\) where \(h_i\) is the health variable \(\upmu \) its mean and \(r_i\) the fractional rank of household \(i\) in the living standards distribution where income per adult equivalent is the measure of living standards; for more details see Kakwani et al. (1997) and O’Donnell et al. (2008).
MHOs are voluntary organizations that provide health insurance services to their members. There are currently over 130 MHOs functioning in Senegal (Diop and Ba 2010).
Independent Fund for Universal Social Protection
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The authors would like to thank Lauren Gilliss, Vanessa Ndong, Dr Ousmane Badiane, the reviewers and the editor for their generous comments and support.
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Séne, L.M., Cissé, M. Catastrophic out-of-pocket payments for health and poverty nexus: evidence from Senegal. Int J Health Econ Manag. 15, 307–328 (2015). https://doi.org/10.1007/s10754-015-9170-4
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DOI: https://doi.org/10.1007/s10754-015-9170-4