Correlates of out-of-pocket spending on health in Nepal: implications for policy.

Background: A key objective of universal health coverage is to address inequities in the financial implications of health care. This paper examines the level and trend in out-of-pocket spending (OOPS) on health, and the consequent burden on Nepalese households.

Methods: Using data from the Nepal Living Standard Survey for 1995-1996 and 2010-2011, the paper looks at the inequity of this burden and its changes over time; across ecological zones or belts, development regions, places of residence, or consumption expenditure quintiles; and according to the gender of the head of the household.

Results: The average per capita OOPS on health in Nepal increased sevenfold in nominal terms between 1995-1996 and 2010-2011. The share of OOPS in household consumption expenditure also increased during the same period, primarily as a result of higher health spending by poorer households. Thirteen per cent of all households were found to incur catastrophic health expenses in 2010-2011. This proportion of households incurring such expenditure rose between the two time periods most sharply in the Terai belt, eastern region and poorest quintile.

Conclusion: The health-financing system in Nepal has become regressive over the years, as the share of the bottom two quintiles in the total number of households facing catastrophic burden increased by 14% between the two periods.