Out of Pocket Health Spending Pushes Billions into Poverty

Rural Healthcare In Shambles

Already a crisis looming large over the world, COVID-19 pandemic is likely to push more than half a billion people into extreme poverty as they have to pay for health services out of their own pocket, according to reports from the World Health Organization (WHO) and World Bank.

The findings on International Universal Health Coverage Day said that the pandemic would halt two decades of global progress towards Universal Health Coverage, which has far-reaching consequence.


In the report, the authors mention Covid 19 disrupted health services and stretched countries’ health systems beyond their limits in 2020 as they struggled to deal with the impact. Immunization coverage dropped for the first time in ten years, and deaths from TB and malaria increased, the report states.

Moreover, it also shattered world economy and the world witnessed worst economic crisis since the 1930s, making it increasingly difficult for people to pay for care. It mentions that half a billion people were being pushed (or pushed still further) into extreme poverty because of payments they made for health care even before the pandemic.

Stressing that there was no time to spare, WHO Director-General Dr Tedros Adhanom Ghebreyesus said; “all governments must immediately resume and accelerate efforts to ensure every one of their citizens can access health services without fear of the financial consequences. This means strengthening public spending on health and social support, and increasing their focus on primary health care systems that can provide essential care close to home.”

He added: “Prior to the pandemic, many countries had made progress. But it was not robust enough. This time we must build health systems that are strong enough to withstand shocks, such as the next pandemic and stay on course towards universal health coverage.”


In his message, UN Secretary-General António Guterres noted that the world must urgently strengthen health systems to ensure they are equitable, resilient and capable of meeting everyone’s needs, including for their mental health as the third year of the pandemic was fast approaching.

He pointed out that the shockwaves of health emergency are hitting hardest those countries that lack health systems capable of providing quality, affordable care for all.

He also called for making more and smarter investments in the foundations of health systems, with an emphasis on primary health care, essential services and marginalized populations.


The new WHO/World Bank reports also warn that financial hardship is likely to become more intense as poverty grows, incomes fall, and governments face tighter fiscal constraints.

Global Director for Health, Nutrition and Population, World Bank Juan Pablo Uribe stated; “even before the COVID-19 pandemic struck, almost one billion people were spending more than 10 per cent of their household budget on health. This is not acceptable, especially since the poorest people are hit hardest. Within a constrained fiscal space, governments will have to make tough choices to protect and increase health budgets.”

The report said that 68 per cent of the world’s population was covered by essential health services prior to the pandemic in 2019. Despite this, the countries had not made advances in ensuring affordability. This led the poorest and those living in rural areas the least affordable to obtain health services and the least likely to be able to cope with the consequences of paying for them. Up to 90 percent of all households incurring impoverishing out-of-pocket health spending are already at or below the poverty line – underscoring the need to exempt poor people from out-of-pocket health spending, backing such measures with health financing policies that enable good intentions to be realized in practice, the report said.

The report also notes that declining incomes and mobility restrictions contributed to a rapid decline in private consumption, declining investment and increased unemployment in most countries.


The report stressed that Out-of-pocket health spending was an inefficient and inequitable way of financing health. This should be reduced as much as possible in favour of pre-payment mechanisms. When it contributes to health financing, it should not be borne disproportionately by the poor and not at all by the poorest. Tracking all OOP health spending is critical to monitoring financial hardship across the whole population, in line with the pledge to leave no one behind that is at the heart of the SDGs, the report said.


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