The Implications of Household Economic Insecurity on Healthcare Spending

Research Objective: Individual and household health and well-being are tied to socioeconomic success globally. Indeed, compromised individual and household health and well-being can have wide-ranging consequences including decreased productivity, job loss, and depleted financial savings. These challenges can exacerbate persistent economic insecurity and trigger a cascade of downstream effects on a household’s social and cultural agency. Unfortunately, such issues are prevalent in sub-Saharan Africa's under-resourced areas, where households increasingly depend on out-of-pocket health expenditures (OOPHE) to supplement public healthcare due to ongoing coverage gaps between healthcare demands and public healthcare. In light of these challenges, our study sought to understand if and how the contextual factors of household economic insecurity predict rural households’ overall healthcare spending, specifically for medical products and appliances, outpatient and hospital services.

Methods: This study uses cross-sectional secondary data from the seventh round of the Ghana Living Standard Survey 7 (GLSS 7) obtained from the Ghana Statistical Services (GSS). Data was collected over a 12-month period in 2016/17 using a multistage sampling technique. We restricted our sample to rural households thus reducing the analytic sample to 5,430. This study used multilevel modeling (MLM) to predict OOPHE while accounting for district-level clustering in healthcare costs (Intraclass correlation coefficient greater than the 0.10 threshold). The outcome variable of interest, economic security, was measured based on whether a household's annual adult-equivalent consumption expenditure falls below or above the country's poverty line of 1,760.80 Ghana cedis.

Principal Findings: The analysis revealed that as compared with economically-secured households, the households classified as economically insecure spent significantly less (72.3% points less) on overall health expenditure (β = -0.544, p < .001). This observed differential household health expenditure is almost entirely driven by spending on medical products and appliances (β = -0.519, p < .001). Female-headed dual-parent households spend 3.2% less on hospital services than male-headed dual-parent households (β = -0.0311, p < .01).

Implications for Policy or Practice: Our findings suggest that households’ ability to spend money on healthcare is constrained by their economic status, which offers insight into how the government can give priority to healthcare initiatives and regulations that meet the particular healthcare requirements of particular groups, such as children, the elderly, and people with chronic illnesses. This presents a unique opportunity for researchers and policymakers to identify potential intervention targets and strategies for addressing healthcare consumption gaps in sub-Saharan Africa.