Columbia International Affairs Online: Working Papers

CIAO DATE: 09/2009

Out-of-pocket household health expenditures and their use in National Health Accounts: Evidence from Pakistan

Christian Lorenz

August 2009

Asia-Pacific Research Center


Out-of-pocket (OoP) household health expenditures are among the most difficult factors to measure in the context of National Health Accounts (NHA). Yet their measurement is important: OoP household expendi-tures are typically the first or second largest source of health care financing in developing countries. Their incor-rect measurement can undermine the credibility of total health spending estimates and thus NHA statistics, which are an otherwise important resource for policy makers. In most countries, private expenditures account for the biggest margin of error in national health spending estimates and represent the most substantial barrier to reliable international comparisons. Differences in accounting methods explain much of the discrepancy across nations. To further the academic investigation of this important issue, this paper focuses on OoP household health expenditures in Pakistan's NHA and suggests steps toward estimating such expenditures more effectively.