CATASTROPHIC HEALTH EXPENDITURE AND POVERTY IN MALAWI

Abstract

Out-of-pocket (OOP) health payments can cause financial hardship to households, which may push them into poverty. The paper investigated the impact of OOP health payments on households’ economic situation in Malawi using data from the Third Integrated Household Survey (IHS3). The study adopts the World Health Organization’s approaching measuring the extent of catastrophic health expenditure and impoverishment. Within the framework of OOP health payments on household’s economic status, the paper computes new poverty estimates. These poverty estimates purportedly take into account the poverty impact of OOP health payments. It is found that if OOP health payments are factored in, the level of poverty in Malawi is higher than official figures suggest. For instance, an additional of 0.93% of households fall below the poverty line after paying for health care. It also uses a logit model to identify the determinants of catastrophic health expenditures. It is found that chronically sick members, large number of illness episodes and large households are highly likely to incur catastrophic health expenditure.