Tough choice: Health beats education in household expenses

Rising medical costs are forcing Bangladeshi families to make tough choices, as a recent survey shows. Health spending has surged more than 202%, taking precedence over education, as households grapple with the increasing burden of healthcare costs.

The Household Income and Expenditure Survey 2022, conducted by the Bangladesh Bureau of Statistics and unveiled at the end of December last year, revealed that households spent Tk3.66 on health for every Tk1 spent on education in 2022, a substantial leap from Tk0.84 spent on health in 2017.

Family average spending on health witnessed a remarkable increase of over 202%, outpacing the total spending growth of 98%. In contrast, average spending on education saw a decline of about 31% during the same period.

Evolving expenditure patterns

The BBS report reveals that the monthly average household spending for education plummeted to Tk578, accounting for only 1.89% of the monthly overall average expenditure. In comparison, back in 2017, education spendings was Tk836, constituting 5.42% of households' overall spending.

Conversely, the monthly household expenditure on health services surged to Tk2,115 in 2022 from Tk700 in 2017. The share of health costs in total spending increased from 4.54% to 6.91%.

Experts in public health and education say the sharp rise in health costs is caused by increased prices and charges for goods and services related to treatment. The post-Covid health complexities have also driven up demands for treatment, contributing to the upswing in health expenditure.

They warn of the potential ramifications of reduced education spending. They fear that this trend may give rise to child labour, early marriages, and a deterioration in the quality of education. The long-term impact could extend to a less skilled and less productive labour force.

Dr Syed Abdul Hamid, a professor at the Institute of Health Economics of Dhaka University, said the increased expenditure on health services and reduced food security could have led to decreased spending on education.

Rasheda K Choudhury, executive director of Campaign for Popular Education, said families prioritise health emergencies and education is an afterthought for them.

Economic strain and food insecurity

The report reveals that about 37% of households are borrowing money to run their families, with an average loan amount of Tk73,980, showing increased economic strain.

Also, one in four people faces food insecurity, with 1.13% experiencing severe prevalence rates and 21.11% facing moderate or severe prevalence rates.

Reasons behind rising health costs

DU professor Syed Abdul Hamid said all treatment costs have increased multifold in the last couple of years. The prices of medicine, admission charges and rates for beds and cabins in hospitals, doctor's visits and all of the related costs have gone up.

At the same time, people are seeking treatment more often in the post-Covid period, he added.

He said that the people in the country spend over Tk97,000 crore each year in out of pocket expenses. The lower public investment in health is leading to an increase in out-of-pocket expenditure.

Government allocation for health has stayed stagnant – lower than 1% of the GDP – for over a decade, but people are forced to spend over four times.

Dr Syed Abdul Hamid Professor, Institute of Health Economics, Dhaka University

The BBS report found the average treatment cost of each person is Tk1,377, with Tk142 for doctor's visits, Tk749 for medicine costs, Tk379 for test fees and Tk107 for transport.

Over half of the treatment cost goes for medicine but the cut in free government healthcare led to a shift towards private clinics and hospitals with their share of treatments rising from 8.61% in 2015-16 to 9.13% in 2022.

Professor Hamid urged the government to increase public spending on health and its quality to reduce pressure on households.

He said that the government allocation for health stayed stagnant – lower than 1% of the GDP for over a decade, but people are forced to spend over four times the government spending.

The cost of travel and time spent on remote healthcare alone is estimated at Tk4,000 crore in 2018. Decentralisation of government facilities will reduce such travel expenses for health services, the professor added.

Has the cost of education really fallen?

Sabina Yeasmin, a parent of a private school student in the capital, said, "A notebook sold in 2019 at Tk20 now costs Tk25, plain paper sold at Tk25 costs Tk35-40 nowadays. The price of a colour pencil box of Tk550 has increased by Tk100 to Tk650."

She said the transport cost, tuition fees, and prices of school bags, water bottles, uniforms, erasers, and tiffin have increased in the last couple of years.

The BBS survey also found a 93.89% hike in the average expenditure on education per student from Tk900 in 2016-17 to Tk1,745 in 2022. The average education cost for students reached Tk1,171 in the rural areas and Tk2,927 in the urban areas.

The share of students going to private schools compared with all primary schools has increased to 7.65% during the period from 4.60% due to fewer government schools and NGO-run schools.

Despite a huge jump in the average education cost per student, the BBS report shows a significant drop in average monthly spending for education from Tk836 in 2016-17 to Tk578 in 2022.

Rasheda K Choudhury linked the incidence of dropout to the reduction in the average education spending by households amid a high growth in the average learning cost of students.

"Although many students have their names in the attendance book, they are not found in the classrooms during the field inspection. Unable to meet the high cost of living, many of them may have dropped out to work or became a victim of child marriage in case of a girl child," she said, adding that the households with high food insecurity do not tend to spend for education.

She also said that Bangladesh is among the top five countries with the highest rate of early marriage according to the United Nations Population Fund report. Families marry off their daughters because they cannot bear the cost of education. Rising child labour is another symptom of financial pressure on households.

However, no BBS official agreed to comment on this issue.

Top officials of the national statistical agency said that the BBS surveyed 14,400 sample households with an equal representation of both the rural and urban areas to find the pattern of income, expenditure and the standard of livelihood.

A separate and more comprehensive study is required to find the reasons behind the change in the indicators, they said.

Consequences of education cuts and ways to prevent it

Experts said the health expenditure will increase further because of an increase in average life expectancy, and rising medicine prices due to loss of Trade-Related Aspects of Intellectual Property Rights (TRIPS) benefits after graduating from least Developed countries (LDCs) status. Failing to finance education may be a major deterioration in human resources in the future.

To avoid this situation, they recommended an increase in spending on education and health by the government.

Syed Abdul Hamid said, about 20% of people pay for medical expenses by borrowing or selling assets. Even with regular income for treatment, people cut costs on food and education. As a result, human resources are deficient in nutrition, and long-term skill development is also hurt.

Rasheda K Choudhury said households in Bangladesh are forced to bear about 71% of the total education cost. The public spending for education and health is not increasing, aligning with the spending for infrastructure and other costs of the government.

The gap between official rhetoric and implementation in education undermines skills development and hinders promised outcomes, she said.

"Unskilled and semi-skilled manpower are being sent abroad while local industries are recruiting manpower from abroad at management level positions," she said adding, that there is no alternative to increasing efficiency by improving education quality.