Patterns and determinants of out-of-pocket health care expenditure in Sri Lanka: evidence from household surveys

This article examines patterns and determinants of the likelihood and financial burden of encountering out-of-pocket healthcare expenses in Sri Lankan households as, on average, more than 60% of households incur such costs. This percentage varies substantially across household categories in demographic properties, sectors and ability-to-pay. Households comprising more than one elderly person, pre-school children, members with chronic illnesses, and literate household heads are at significant risk of incurring out-of-pocket payments and bearing a higher financial burden. Rural and estate sector households are more likely to bear a higher burden. The marginal effects of household income show that the burden of private healthcare is less sensitive towards changes in household income and that households' burden in private healthcare was regressive in 2006/2007. Hence results imply that low-income households need to be protected. Analysis of supply side factors shows that availability of closer government hospitals, bed numbers and dentists in government hospitals reduce the burden of out-of-pocket expenses. However, more government doctors lead to higher likelihood and burden of incurring such healthcare expenses and create a government-doctor-induced cost. Therefore, the results show a convincing need for the expansion of healthcare infrastructure by government and a policy framework for its doctors that will lessen the financial burden in Sri Lankan households, particularly the poor.