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The Determinants of Household Out-of-Pocket (OOP) Medical Expenditure in Rural Bangladesh

Abstract

Background

The Government of Bangladesh has a National Healthcare Strategy 2012–2032 that reiterates a goal to achieve universal health coverage (UHC) by the year 2032. To achieve the goal, the government has set up a strategy to reduce the share of out-of-pocket (OOP) expenditure from the current 64% of the total household healthcare costs to 32% at the national level. As the majority of the people live in the rural areas, and the rural people are generally poor, the success of the strategy relies predominantly on any type of pro-poor healthcare policy and strategy.

Objective

To estimate if there is any feedback effect in the healthcare costs model and to estimate relative contributions of various determinants to OOP medical expenditure in rural Bangladesh.

Methods

This study used an econometric approach and a system of simultaneous equations models. The OOP expenditure was measured by household medical expenditure, which is a sum of expenditures for medicine, ayurvedic, various kinds of tests, hospitalization, and dental-related, incidental and other health-related costs. The feedback effect hypothesis is tested by the level of statistically significant dependent variables of the three equations used in the system of simultaneous equations model. The relative importance of the determinants of OOP expenditures was measured by the size of standardised coefficients of the determinants.

Results

There is a feedback effect between the three dependent variables—medical expenditure, sickness of the household members and the selection of healthcare provider. We also find that although the selection of private healthcare facilities is relatively the most important determinant of OOP expenditures in the rural areas, the sickness of the members of a household and the selection of healthcare provider together have a real effect on the OOP expenditure in rural Bangladesh.

Conclusions

Bangladesh needs a holistic approach to undertake any strategy; private healthcare facilities are relatively the most important source of high medicine costs; hence, the supply of medicine and its price should be given attention on a priority basis for pro-poor policy framing in conjunction with healthcare insurance and motivation to consult doctors rather than pharmacists in case of sickness.

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Fig. 1
Fig. 2
Fig. 3

Source: Bangladesh national health accounts 1997–2012

Fig. 4

Source: Bangladesh Integrated Household Survey (BIHS) 2011–2012

Notes

  1. As per the World Bank [34] GNI is US$ 1080.00 in  2014 (source: http://data.worldbank.org/country/bangladesh). We use a conversion rate of US$1.00 = Tk. 79.00.

  2. This is a sum of medicine, doctor’s fee, pathological test, surgical cost, hospital rent, patient’s attendant’s and transport costs.

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Acknowledgements

We are grateful to the two anonymous referees and editor of the journal for their suggestions, which have greatly improved the paper.

Data Availability Statement

The data used in this study are available publicly online at https://dataverse.harvard.edu/dataset.xhtml?persistentId=hdl:1902.1/21266.

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Authors and Affiliations

Authors

Contributions

SAKM conceived the idea, designed the study plan, analysed and interpreted the data, and wrote major parts of this research paper. RK interpreted the data, helped in variable selection and wrote the policy prescription section. MMR wrote the introduction section, did the editing, polishing and administrative job, and undertook the responsibility of corresponding author of this paper.

Corresponding author

Correspondence to Mohammad Mafizur Rahman.

Ethics declarations

This study was funded by the researchers themselves. No external funding was used for this study.

Conflicts of interest

There are no conflicts of interest for the authors Shamsul Arifeen Khan Mamun, Rasheda Khanam and Mohammad Mafizur Rahman.

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Mamun, S.A.K., Khanam, R. & Rahman, M.M. The Determinants of Household Out-of-Pocket (OOP) Medical Expenditure in Rural Bangladesh. Appl Health Econ Health Policy 16, 219–234 (2018). https://doi.org/10.1007/s40258-018-0376-8

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