Effect of Out-of-Pocket Health Expenditure on the Welfare of Rural Households in Kwara State, Nigeria

Abstract

Serious illness can induce utilization of health services which can impose high costs on households at a time when household ability to earn income is hampered due to inability to work of the ill individual and caregivers and as such affecting the welfare of the household as a whole. This study was carried out to examine the effect of out-of-pocket health expenditure (OOP) on welfare of rural households in Kwara State Nigeria. Using a Two-stage sampling technique, 180 rural households were sampled out of which 175 households were used for the analysis of the study. The study employed descriptive statistics and Ordinary least square (OLS) regression in analysing the data collected for the study. The result of the descriptive statistics shows that on the average, household head in the study area was 42years of age with 7years of schooling, 22years of farming experience, about household size of 5 in adult male equivalent, a per capita income of N4,960, calorie consumption of 3151.46kcal/AE/day and monthly health expense of N676. The result of the analysis carried out to examine the effect of health expenditure on per capita calorie intake and income of households, shows that out-of-pocket health expense has a positive significant effect on both per capita calorie intake and income at 10% statistical level. The results of the study have shown the adverse effect of OOP on welfare of households in the study area and as such add to existing literatures on the welfare effect of health expenditure in developing countries. The study therefore recommends that the government should promote and sustain alternative health care financing mechanism like insurance schemes to assist poor households in benefiting from health services to reduce their OOP. Also, government should encourage the establishment of private health insurance schemes by creating enabling environment for them to thrive.