Report highlights “catastrophic” personal payments for health care in Asia

BMJ 2007; 334 doi: (Published 01 March 2007) Cite this as: BMJ 2007;334:447
  1. Ganapati Mudur
  1. New Delhi

    Bangladesh, China, and India have the highest incidence in Asia of “catastrophic” payments from individuals' own finances to cover healthcare costs—those payments that are so crippling financially that they throw a household into catastrophe.

    Such payments severely disrupt household living standards, a new study has said. The report, published online ahead of print publication on 21 February in Health Economics (, doi: 10.1002/hec.1209), says that patients' own out of pocket payments account for 80% of spending on health care in India and Vietnam and more than 60% in Bangladesh and China. The World Health Organization said in a 2005 report on catastrophic health costs that any spending that was above 40% of non-subsistence income should be considered a catastrophe (

    The study, conducted by Eddy Van Doorslaer of the department of health policy and management at Erasmus University in the Netherlands and colleagues in Asian countries, analysed the size of personally financed healthcare expenses as a proportion of household budgets in 14 countries that between them have four fifths of Asia's population.

    Their analysis showed that 3% to 7% of all households in Bangladesh, China, India, Nepal, and Vietnam spend more than 40% of household expenditure, excluding food, on out of pocket healthcare payments.

    “India's 3.4% [of households] figure indicates that six million households are likely to face the catastrophic impact of health costs each year because of out of pocket payments amounting to 40% of non-food expenditure,” said Anup Karan, one of the study's authors and a fellow at the Harvard School of Public Health.

    Disputing prevailing notions that hospitalisation accounts for the major share of out of pocket expenses, the study shows that payments for drugs also disrupt household living standards. In Bangladesh, India, and Vietnam 70% of out of pocket expenses go towards drugs.

    The findings also contradict previous assertions that poorer people spend a greater share of out of pocket payments on health care. Instead, the study found that personal spending on health increased with total household consumption. “We also find that catastrophic payments are widespread, often associated with common illnesses, and [are] not only the result of major illnesses,” Dr Karan said.

    Health experts in India said that the findings bolster evidence for a steady deterioration of services in the nation's public health facilities. “As the public sector has weakened, people have gravitated towards a private sector where neither costs nor standard of care is regulated,” said Abhay Shukla, convener of the People's Health Movement, a network of public health organisations in India.

    “The human misery is tremendous—the numbers don't reveal it,” Dr Shukla said. “People sell assets or find themselves in deep financial crisis. The poorest and the most vulnerable just walk away from treatment and go home.”

    The researchers have attributed the relatively low incidence of catastrophic personal payments in Malaysia, Sri Lanka, Thailand, and Indonesia and in high income countries such as Taiwan and Korea to effective public health services and low or absent fees to users.

    “Without systems to protect the poor a single illness can push a household over the brink,” said Delampady Narayana, a researcher at India's Centre for Development Studies in Trivandrum. He had shown earlier that in the southern state of Kerala catastrophic health payments account for 18% of urban households and 29% of rural households being below the poverty line.

    “Social health insurance to cover the poor is a solution, but we don't see any serious move towards that in India yet,” said Dr Shukla.

    View Abstract

    Log in

    Log in through your institution


    * For online subscription