Impoverishing effects of catastrophic health out-of-pocket payments in Nigeria

Out-of-Pocket (OOP) expenditure on healthcare is a major share of total healthcare expenditure in many developing countries, including Nigeria. Households in different income groups in Nigeria spent a larger share of income mainly on consumption and basic needs, hence, OOP expenditure for health constituted a burden with attendant effects on household well-being. Catastrophic headcount and Overshoot mean positive gap and concentration indexes were used to capture the incidence and severity of catastrophic health expenditure. The poverty headcount, poverty gap, normalized poverty gap, and its mean estimate were used to empirically identify the effect of catastrophic health expenditure using the national poverty line of ₦137,430 per year. Data on 22,110 households with non-zero expenditure were obtained from the 2018/2019 Nigeria Living Standard Survey. The incidence and severity of catastrophic health expenditure were higher for poorest and poor income quintiles using total consumption expenditure and total non-food expenditure at various catastrophic thresholds. The results indicated that about one million Nigerians were pushed into poverty due to OOP expenditure. Widening the coverage of the available social health insurance and implementation of alternative means of healthcare financing would minimize the financial burden on many poorest and poor households.