Reducing financial hardship is a core function of health systems. It is the basis of the ongoing global drive to achieve universal health coverage (UHC). Out of pocket expenses (OOPE) is the most widely used surrogate indicator to assess the level of financial hardship faced by a given population. It is assumed that if the OOPE exceeds 10 percent of the household income, it has the potential to impoverish people. Similarly, if it exceeds 30 percent of the household income after meeting essential food needs, it is considered as being catastrophic, with a risk of pushing people into debt trap and poverty. In the absence of robust income data, largely due to informal labor and economy, household expenses are being used to categorize OOPE as impoverishing and catastrophic. OOPE, in the absence of an income denominator, has limitations in being a marker of financial hardship.
Financial hardship may have to be considered in the overall context of essential social needs (food, shelter, children’s education and marriage, health, employment etc.,) and not just in the context of health needs. Hence, we may have to use different indicators to assess financial hardship. Malnutrition in household members is a surrogate indicator as balanced nutrition is the first to suffer. School dropout is another marker as the children will be recruited into income generating activities when families face hardships. Foregone health needs until they become inevitable are common in poor people and it does not figure in OOPE. Sale of fixed assets, high-interest borrowings, and borrowing to service current borrowings (debt trap) reflect extreme form of financial hardship. Hence, financial hardship of a household may be assessed using a basket of indicators in place of single indicator like OOPE.
National and state governments have introduced various social protection schemes from time to time. These include ration supplies of food items, free education, free healthcare, free vaccines, employment guarantee schemes, subsidies on power, water, cooking gas, fertilizers, seeds etc., old age pension schemes, special incentives for pregnant women, subsidized education and farm loans, old age pension schemes, loan waivers, free public health insurance schemes etc. Hence, health financial protection should always be viewed along with the social protection offered by the state.
Hence, there is a need to revisit health policies directed at reducing financial hardships in seeking healthcare. There is a case for merging various methods of beneficiary identification for extending social and health protection. It is time we assess financial hardship using a basket of socio-economic indicators and tailor the benefits accordingly. There is also a need to create adequate awareness through robust information, education, and communications systems and digital apps. Illiteracy, both nominal and digital, should not become a means to inequity. Digital technologies can be leveraged to ensure that beneficiaries are correctly identified at predefined intervals, and the benefits reach them without leakages. Then only we can assure true social and health protection.
(Views expressed are personal.)
Dr Krishna Reddy Nallamalla,
President, InOrder Regional Director, South Asia, ACCESS Health International
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