Catastrophic out-of-pocket healthcare payments for rural households in Bangladesh: Potential impact of introducing user fees

Research objective. The purposes of this research are to discuss the patterns of catastrophic out-of-pocket payments, to explore the determinants of catastrophic out-of-pocket payments, and to find out the potential impact of introducing user fees for selective services, such as illness and antenatal care, on catastrophic out-of-pocket payments in rural households of Bangladesh.; Methodology. Data were collected from 5,400 households in selected rural areas of Bangladesh. Out-of-pocket healthcare payment is defined as 'catastrophic' if the ratio of annual per-capita household health expenditure to total annual per-capita household expenditure exceeds a specific pre-defined threshold level. Logit and Tobit models were used for identifying the variables affecting the incidence and intensity of catastrophic out-of-pocket payments. User fees were proposed to recover the cost of providing illness and antenatal care services. Price elasticity and inelasticity approaches with and without options of exemption policies were followed to find out the impact of introducing user fees on catastrophic out-of-pocket healthcare payments.; Principal findings. The incidence and intensity of catastrophic out-of-pocket payments, as expected, varied widely depending on threshold definition. Age of household head, employment status of household head, household size, per-capita expenditure, and proportion of children aged less than 5 years and reproductive women aged 15-45 years in the household were important in explaining the incidence and intensity of catastrophic out-of-pocket healthcare payments across households in the sample. Introduction of user fees in the health system increased the incidence and intensity of catastrophic out-of-pocket healthcare payments. Exemption policies decreased the incidence and intensity and protected poor households from catastrophic out-of-pocket healthcare payments.; Conclusions. The findings have policy implications to protect households from catastrophic out-of-pocket healthcare payments. Using the factors affecting the incidence and intensity of catastrophic out-of-pocket payments, it is possible to estimate the risk of catastrophic payment for each type of household. The probability of experiencing catastrophic payment can be used for targeting households for exemptions or for providing subsidized healthcare services. The results suggest that the incidence and intensity of catastrophic payments for healthcare can also be reduced significantly through adopting risk-pooling policies, such as community insurance programs, and enhancing tax collection.