The Catastrophic Economic Consequences of Illness and their Effect on Poverty Estimates in Egypt, Jordan, and Palestine

Illness can have catastrophic economics consequences on households in developing countries. In extreme cases, illness can drive households to sell their assets or push them into extreme poverty. Using national representative surveys, the purpose of this work is to examine the effect of out-of-pocket health payments on households’ economic situation in three developing countries with a combined total population of 92 million: Egypt, Palestine and Jordan. The paper quantifies catastrophic health payments and impoverishment in the three countries. The analysis confirms that out-of-pocket health payments exacerbate households’ living severely in Egypt, pushing more than one fifth of the population into financial catastrophe and four percent into extreme poverty. However, in Jordan and Palestine, the disruptive effect of out-of-pocket health payments is modest. Additionally, based on multi-country regression analyses based on data from the World Health Surveys, the study fills the gap in the literature by providing statistical evidence on the relationship between public health financing and the prevalence of impoverishment by health care payments.