Can the Poor in Low and Medium Income Countries Reduce Out of Pocket Payment and Catastrophic Health Spendings? A Literature Review

Objective: This paper aims to review, analyze, and discuss the incidence, severity, and effects of out-of-pocket-induced catastrophic health expenditure to understand its drivers and impacts, and to explore strategies to reduce it. Materials and Methods: The review involved in-depth electronic searches across four databases: Google Scholar, ScienceDirect, Medline, and PubMed, to identify relevant research articles. The criteria filtered the data for relevance, suitability, and reliability, excluding duplicates, unrelated data on out-of-pocket payments and catastrophic health expenditure, and irrelevant sources, resulting in 62 articles. Results: The study found that household out-of-pocket health expenditures and catastrophic health spending are high in low- and middle-income countries. However, the effects of catastrophic health expenditures on low-income households are inconsistent, and factors such as family size, limited income, elderly members, hospitalization, unemployment, and healthcare expenses were acknowledged. These elements push out-of-pocket health spending above the 10% of household expenditures threshold, leading to poverty and impoverishment. Policy efforts to reduce out-of-pocket payment-induced catastrophic health spending have been ineffective, and how to better address these costs remains unclear given the diverse socioeconomic factors. Conclusion: The catastrophic health expenditure is often overlooked and remains underprioritized by decision-makers in many low- and middle-income countries. As these effects intensify, countries must develop health financing policies that protect people living in poverty from catastrophic health expenditure risk and, reduce excessive reliance on out-of-pocket payments for healthcare. Other policies include strengthening prepayment, targeted subsidies to enhance equity, and advance universal health coverage.