Columbia International Affairs Online: Working Papers

CIAO DATE: 07/2010

Health Expenditures in Pakistan: Cross-Checking Household Expenditure Data on Health for NHA and Adjustment with National Accounts

Christian Lorenz

June 2010

Asia-Pacific Research Center


According to hitherto available data, health expenditures in Pakistan are relatively low in international comparison. Data2 published by the World Health Organization (WHO) for the year 2005 shows a lack of Pakistani health expenditures in most indicators, compared to other low-income countries (LIC). To answer the question whether these results reflect the real situation in Pakistan or whether they exist due to statistical problems, Pakistan, for the first time, developed its National Health Accounts (NHA) in 2009. Only the availability of good estimates of health expenditures allows for evidence-based policymaking and therefore for good governance.
The results clearly indicate that the situation in Pakistan is better than what was earlier estimated; however, the total health expenditure (THE) is still low compared to neighboring countries and other LIC. As a result, it is clear that the WHO health expenditure figures for Pakistan are understated, because they mainly comprise public and household out-of-pocket expenditures on health. Expenditures of many other entities, like military, cantonment boards, autonomous bodies, private hospitals, and so on, have not been taken into account in earlier estimations. Therefore, expenditure figures of NHA Pakistan are higher than those of WHO. Overall, the official NHA results show THE, which is 27 percent higher than WHO figures.
Furthermore, this paper cross-checks NHA results with other already available data sources on household expenditure. This comparison includes preliminary results of the Family Budget Survey (FBS), which also includes health items as well as National Accounts (NA) data. In line with this comparison, we calculate a raising factor that can be used for the adjustment of NHA results according to NA. The raised NHA result shows 102 percent higher out-of-pocket (OOP) spending on health; this would result in OOP health expenditures of $25.15 USD per capita (compared to only $12.45 USD per capita in the NHA estimation). This result, based on the NA figure with $33 USD THE per capita, leads to a different evaluation in international comparison, since it nearly reaches the level of India, with $37.5 USD and more than the average of all LIC with $27 USD.