The Burden of households’ out-of-pocket Health Expenditures among Population Groups in Nigeria

The welfare of consumers is maximized if everyone gains access to necessary and needed health care. However, inequitable distribution of income and differences in socio-economic and demographic status affect the accessibility of most population groups, making some to pay higher on health care than others. The Nigerian Health sector faces a lot of challenges that affects its performance as private subsector dominates causing most payments for health care to come out-of-pockets.

This research attempts to see the variations in out-of-pocket spending by different population groups in Nigeria and the incidence of catastrophic spending across the six geopolitical zones of the country. Any direct financial outlay by household constitutes out-of-pocket spending which can be catastrophic if the household has to sacrifice consumption of other goods and services for health care. Taking each household as a single unit, if the household's expenditure exceeds 40% of its non-food expenditure, it becomes catastrophic. It is therefore argued that any spending on health care by poor households is catastrophic as they are unable to attain the subsistence level of consumption.

The study uses the data generated from the Nigeria Living Standard Survey (NLSS), 2004 and adopts Tobit technique and descriptive statistics as tools of analysis. The findings indicate that the poor, old, male-headed household, people from rural areas, married, the unemployed, large households, people with high education attainment are most likely to pay higher out-of-pocket health expenditure. Our findings also show that North-eastern Nigeria has the highest level of catastrophic spending with South-west having the least.

The Northern zone put together has an average of 21.17% of people with catastrophic spending while the South has 20.13%. In general, our findings indicate that there is a high inequality in health spending and status emanating from differences in income and location.