Financial protection in health revisited: Is catastrophic health spending underestimated for service‐ or disease‐specific analysis?

Abstract

AbstractEconomists originally developed methods to assess financial catastrophe using total or aggregate out‐of‐pocket health spending. Aggregate out‐of‐pocket health spending is financially catastrophic when it exceeds a fixed proportion (i.e., threshold) of a household's total income or expenditure in a given period. However, these methods are now applied to assess financial catastrophe in disease‐ or service‐specific rather than aggregate out‐of‐pocket health spending without using disease‐ or service‐specific thresholds. This paper argues that not using disease‐ or service‐specific thresholds for such assessments is misleading and underestimates the burden of financial catastrophe, especially among households from poorer backgrounds. It then proposed disease‐ or service‐specific catastrophic payment thresholds, applied them to Nigeria and found that financial catastrophe was underestimated for the five service groups considered. The paper stresses the importance of using disease‐ or service‐specific thresholds and avoiding unadjusted thresholds, which may leave poorer households behind as financially protected.