Distributional Analysis of Household Health Expenditure in Nigeria

Abstract

The major means of financing healthcare in Nigeria, among other financing mechanisms is out-of-pocket expenditure. This is because most households (over 95%) are excluded from the financial risk protection of health insurance; hence the decision to utilize healthcare services by households implies the decision to pay directly out-of-pocket. This paper employs data from the Harmonized Nigerian Living Standard Survey 2009/2010. Using concentration index, Gini index and Kakwani index for the analyses, and also combining Lorenz curve and concentration curve to show inequality in health payment across socioeconomic groups in Nigeria, we found out-of-pocket payment to be a progressive healthcare financing mechanism across income quintile and geopolitical zones. It is therefore concluded that there exists a possibility of the Nigerian health system to exclude significant proportion of her population from the use of healthcare services simply because they cannot afford the cost of treatments.

Keywords: Household out-of-pocket expenditure, Income quintile, Geopolitical zones, Kakwani index, Gini index, Concentration index, Nigeria.