Out-of-Pocket Payments, Catastrophic Health Expenditure and Poverty Among Households in Nigeria 2010

Abstract Background: There is high reliance on out-of-pocket (OOP) health payments as a means of financing health system in Nigeria. OOP health payments can make households face catastrophe and become impoverished. The study aims to examine the financial burden of OOP health payments among households in Nigeria. Methods: Secondary data from the Harmonized Nigeria Living Standard Survey (HNLSS) of 2009/2010 was utilized to assess the catastrophic and impoverishing effects of OOP health payments on households in Nigeria. Data analysis was carried out using ADePT 6.0 and STATA 12. Results: We found that a total of 16.4% of households incurred catastrophic health payments at 10% threshold of total consumption expenditure while 13.7% of households incurred catastrophic health payments at 40% threshold of nonfood expenditure. Using the $1.25 a day poverty line, poverty headcount was 97.9% gross of health payments. OOP health payments led to a 0.8% rise in poverty headcount and this means that about 1.3 million Nigerians are being pushed below the poverty line. Better-off households were more likely to incur catastrophic health payments than poor households. Conclusion: Our study shows the urgency with which policy makers need to increase public healthcare funding and provide social health protection plan against informal OOP health payments in order to provide financial risk protection which is currently absent among high percentage of households in Nigeria