Determinants of Healthcare Expenditure among Households in Nigeria

Abstract

The optimal goal of any economy is to provide accessible, quality and an uncompromising healthcare system. While trying to achieve this goal, the health system should be such that it ensures households are insured against adverse consequences of healthcare expenditure. In Nigeria, the primary means of funding healthcare is out-of-pocket. The consequences of outof- pocket (OOP) healthcare expenditure on household’s state of economic can be alarming and catastrophic, especially on low income earning households and those lacking healthcare insurance scheme. Poor households can be further pushed into penury, they may cut down on the consumption of essential items such as food and clothing, and may abstain from medical care, thus perpetuating the cycle of illness and disability. The study finds it crucial to investigate and understand why household is still the major financier of healthcare service in Nigeria. The Grossman (1972) human capital theory provided the theoretical framework for the study. Data was obtained from the Harmonized Nigeria Living Standards Survey (HNLSS), 2010, produced by the National Bureau of Statistics. The HNLSS covered 77,400 households across the six geopolitical zones. A logit model was estimated to examine the determinants of healthcare expenditure in Nigeria. The findings reveal that increase in household age, and education is positively associated with demand for healthcare. Household size, female-headed household, urban household, religion and agricultural workers negatively affects demand for healthcare. Emphasis on measures geared towards providing financial support to reduce the burden of healthcare spending among households should be intensified by the government.