Measuring Socioeconomic Disparities in Out-of-Pocket Healthcare Expenditure: Evidence from Saudi Arabia

This study aims to identify the determinants of healthcare expenditures and their impacts on the livelihoods of urban populations in Riyadh in Saudi Arabia. Employing quantitative econometric methods, specifically ordinary least squares (OLS) regression on data from the 2018 Saudi Arabia Household Income and Expenditure Survey (HIES) and is further supported by the WHO-based Global Health Reviews Living Standard Measurement Survey (LSMS) the findings reveal that insurance membership does not significantly lower out-of-pocket healthcare expenditure (OOPHE), which reflects limitations in existing programs such as high deductibles, cost-sharing requirements, and restricted coverage that leave households exposed to substantial healthcare costs. In addition, the study finds that higher average monthly income is associated with increased OOPHE, indicating that wealthier households tend to utilize a broader range of both essential and elective healthcare services, leading to higher expenditures despite their greater financial capacity. Healthcare spending variation is also driven by demographic factors. Further, male-headed households do not show a statistically significant effect but female-headed, households with young children, and larger households incur more OOPHE. Indeed, it indicates that other factors such as socioeconomic and familial dynamics are instrumental in shaping the healthcare costs. These findings thus emphasize the imperative for policymakers not only to increase insurance coverage but also to reframe insurance designs to be more protective and financially comprehensive. Possibilities include the reduction of cost-sharing requirements, lowering deductibles, and expanding the range of services covered to better protect vulnerable populations. Research using longitudinal data should examine whether improvements in insurance design contribute to reductions in OOPHE over time.