This paper, based on a representative household survey in Rajshahi city, Bangladesh, is the first to consider illness, care-seeking behavior, demographics of the household head, and household economic characteristics as household-level predictors of OOP payments and catastrophic expenditure. It is also among the few examples of studies that have reported the incidence of catastrophic healthcare expenditure in Bangladesh 
, and the first to estimate this incidence from a representative, probability-sampled survey.
This study found that sampled households, none of whom have any form of risk-pooling insurance, spend about 11% of their total household budget on healthcare, and nearly 9% of households experience financial catastrophe. At a 25% non-food expenditure threshold, the incidence of financial catastrophe was similar to another published study, at 18% 
. The study demonstrated that the medical spending associated with an illnesses episode increased as household consumption expenditure increased, which is similar to another study in India 
; however, we showed that despite this increase in spending, the risk of catastrophic expenditure decreased with household consumption expenditure. In addition to the common finding that household consumption quintile and receiving inpatient care are associated with financial catastrophe, this study showed the importance of the average number of illness episodes among children and adults, and the presence of chronic illness in a household as key determinants of high OOP payments and financial catastrophe. Higher levels of education in the household head were also protective against OOP spending and catastrophic expenditure, similar to other developing countries 
This study revealed that the per capita monthly OOP health expenditure made by households was TK 138.0 (US$ 1.8), which is similar to national-level findings in Bangladesh 
. The estimated proportion of catastrophic expenditure in our study is consistent with van Doorslaer et al 
but contradicts the findings (1.2%) of Xu and colleagues 
, though our study supports their findings that poor households were less able to cope with any level of health payment than rich households 
. The disagreement in proportions of catastrophic expenditure between our study and Xu et al is likely to be due to differences in data and measurement methods. Their study used the Bangladesh HIES, which mainly emphasized poverty assessment and was not designed to account for details of household illness and their treatment responses or costs. According to Xu and colleagues, the estimated proportion of households facing catastrophic expenditure in Bangladesh may be underestimated in the 1995 HIES survey due to missing information such as the absence of durable goods from the consumption calculation, and the very limited information collected on episode-of-illness level healthcare expenditure data, and care-seeking behavior. In their study, van Doorslaer and colleagues estimated the incidence of catastrophic expenditure based on total household consumption and non-food expenditure but they did not assess the incidence of catastrophic expenditure using household capacity to pay. In contrast, our study considered all household members who suffered any illness and their treatment response in the past 30 days, and then collapsed information into household level for analysis purposes. Therefore, our study offers more accurate information than the previous two studies conducted in Bangladesh, and also used a more detailed and accurate methodology for estimating the burden of OOP payments, with adjustments for household size and capacity to pay 
Consistent with other studies 
, although the richest households reported more illness, spent more on health and utilized more private facilities compared to the poorest quintile, risk of financial catastrophe was higher in the poorest households, indicating that the burden of financial catastrophe falls disproportionately on the poor. The three key preconditions for catastrophic health expenditure are the presence of health services requiring payments, low capacity to pay, and lack of prepayment or health insurance options 
. These conditions are all present in the poorest households in Bangladesh, and the high proportion of catastrophic expenses in the lowest quintiles points to the urgent need to remove one or all of these preconditions. For example, the OOP share dropped markedly following the introduction of health insurance in China 
, Vietnam 
, and India 
, and the introduction of even basic prepayment or health insurance systems in Bangladesh may have a similar effect on the poorest households.
Our analyses demonstrate a negative impact of average illness per child and adult, and presence of chronic illness in the household, on the household economy. These results are similar to the determinants of catastrophic expenditure in Burkina Faso and India 
, such as lack of formal education, tuberculosis, diabetes, dementia, modern medical care, number of illness episodes among adults and chronic illness. In concordance with results from India 
, the level of OOP payments is higher among those who used inpatient care services and suffer from chronic illness. Moreover, the study also revealed the importance of the average number of illness episodes among children and adults, and larger household size as key factors responsible for high OOP payments. Chronic care for NCDs puts an enormous and continuous financial strain on household budgets. The costs of care of chronic NCDs often contribute to increased OOP payments, pushing households into impoverishment or below the poverty line 
. In such critical situations, only a strong risk pooling mechanism can prevent the poorest households from risk of financial catastrophe. Health insurance can have the dual function of protecting families against health shocks that increase healthcare needs, and against economic shocks that reduce their capacity to finance healthcare 
Type of health service used was also another important determinant of OOP payments and financial catastrophe, with intensity of OOP payments at public outpatient facilities lower than private outpatient facilities. These findings are similar to several studies from developing countries 
but at variance with a Nepalese study 
. Although public health facilities in Bangladesh are heavily subsidized by the Government 
, the risk of incurring OOP expenditure as well as catastrophic spending remains high for users of these facilities. This suggests that subsidized programs may not be working properly among disadvantaged groups. One reason could be that unofficial fees in public facilities can significantly exceed the amounts expected in official payments, and fee exemptions are not always possible 
, suggesting that public facilities are not providing their expected financial protection in practice. Another possible reason is the need to purchase drugs and ancillary health services such as medicines or tests on the private market. This suggests the need for state-subsidized public clinics to provide more holistic and inclusive services. Finally, similarly to other studies 
, those receiving inpatient care were at high risk of OOP expenditure and catastrophic spending. In the absence of a risk-pooling mechanism, all households face high risk of financial catastrophe from OOP payments for inpatient care.
The research protocol and sampling process in our study was designed to avoid any biases in the results, but our study has several limitations. We examined only urban households in one metropolitan area of the country, so the results cannot necessarily be generalized to the whole country. However, the representative nature of the sample means that the results may be applicable to other cities, and thus the study may reflect the reality of health market participation for a large proportion of the Bangladeshi population. Inpatient service use is infrequent (4%) and a much larger sample is required to explore the role of chronic vs. acute illness in hospitalization and costs. Such an analysis might better describe the role of preventable hospital admissions in catastrophic spending. Consumption and expenditure were self-reported and prone to error, although estimates were confirmed by other household members or aged persons in the community. For example, female interviewees frequently over- or under-estimated the cost of bicycles, sewing machines and cars, but we minimized the bias by asking another household member or an older member of the household.
This study identifies determinants of high medical expenditure and financial catastrophe: illness either in children or in adults, chronic illness, receiving inpatient care, poorer economic status and lower education level of the household head. The chronic care of NCDs requires long-term routine clinic visits, testing, and medications, reducing households’ flexibility to respond to the cost of unexpected hospitalization or other illness episodes. It is clear that immediate action is necessary to reduce levels of catastrophic health expenditure by reducing the burden of OOP payments in Bangladesh, which can be achieved by:
- Implementing compulsory health insurance for salaried workers in both public and private sectors, and voluntary memberships for dependents, farmers and self-employed persons, similarly to programs in Vietnam that have been shown to reduce OOP payments to lower levels than observed in this study 
- Improving routine management of NCDs, to reduce the cost of chronic disease management, and incorporating chronic disease management into public services and health financing initiatives, to ensure that this expenditure is included in risk-pooling and welfare initiatives and the high OOP payments associated with chronic illness that were identified in this study can be ameliorated by better and more equitable management, prevention and treatment
- Incorporating ancillary services into basic care packages in public facilities, so that users are not required to pay significant OOP expenses for essential pharmaceutical or other ancillary services which are supposed to be almost free, but which our study found were still associated with high OOP payments and catastrophic expenditure risk
If necessary reforms are implemented, especially those targeted at the poorest members of Bangladeshi society, significant reductions in the burden of OOP payments can be made, with consequent improvements in the health of the population.