How to rein in out-of-pocket expenses as Bangladesh aims for universal health coverage

The out-of-pocket expenditure for healthcare in Bangladesh is currently at least 68.5%, up from 67% in 2015 and 63% in 2012. To achieve universal health coverage (UHC), this expenditure needs to be reduced to 30% by 2030. Medicine costs account for more than 64% of out-of-pocket expenses, while diagnostic tests account for about 12%, hospital bed or cabin rentals about 10%, and consultation fees about 13%. Let's find out why out-of-pocket expenses on health are so high.

Massive changes in lifestyle and food habits, an increase in the ageing population, a rise in global temperature, and damage to the natural ecosystem have led to the emergence of new infectious and non-communicable diseases. Moreover, the invention of new medicines and medical devices, along with an increased demand for healthcare, has led to a rapid worldwide upsurge in health expenditure. 

Bangladesh is not an exception. This surge in healthcare spending is a major anxiety for policymakers of developed countries. Many countries have adopted new strategies to contain health expenditures within tolerable limits.

Let us first analyse the sources of out-of-pocket expenses in Bangladesh. This includes the diagnostic test costs, medicine costs, rental costs of hospital beds or cabins, doctors' consultation fees, and expenses for surgical procedures. Although, out-of-pocket payments should be minimal in public health facilities which often does not happen in reality. Lack of necessary medicines, as well as diagnostic services, are the two main factors behind this. 

Despite having adequate medicines in the upazila health complexes and district hospitals, patients often do not get the required medicine due to the lack of modern medical storage facilities. This pushes the patients to buy medicine from privately owned pharmacies. Patients also often depend on private diagnostic centres due to the inadequacy of most public health facilities' diagnostic services.

On the other hand, about 60% of the patients still visit drug stores or quacks at the first contact for general ailments. The underlying factors include inadequate manpower, medicines, and diagnostic services at the public health facilities in rural areas and lack of proper primary health care infrastructure in urban areas. Selling medicines is the primary purpose of the informal providers (drug stores and quacks). This has led to the unnecessary utilisation of medicines which is a significant factor in high out-of-pocket payments. 

Patients often visit distant hospitals (e.g. district hospitals, medical college hospitals, and specialised hospitals) for general ailments due to the lack of adequate services at the union and upazila levels of public health facilities. This also pushes up out-of-pocket expenses to a larger extent. A study funded by the Bangladesh Medical Research Council found that people need to additionally spend more than  Tk4,000 crores due to the lack of necessary health services at the nearest public health facilities. 

A large portion of the population seeks health care from private health facilities due to the lack of quality and timely healthcare in public health facilities. Taking this advantage, thousands of private hospitals and diagnostic centres have mushroomed across the country. More than two-thirds of the hospital beds are owned by the private sector, of which a significant portion remains vacant throughout the year. So these hospitals charge high prices to cover the costs. 

Moreover, a large number of private hospitals pay brokerage fees to drug sellers, quacks, ambulance drivers, and unscrupulous staff in public health facilities. This also leads to high prices. Many private health facilities also have the tendency to provide excess or unnecessary services beyond the protocol. All these factors push high out-of-pocket expenses.

On the other hand, the price of diagnostic services in private health facilities is much higher due to 40-50% referral fees (i.e. commission) given to most doctors prescribing diagnostic tests. Unnecessary diagnostic tests are also seen in the patients' prescriptions because of the referral fees. In addition, paying referral fees is an important factor in not using the reports of previous diagnostic tests when patients switch doctors. 

There is also a severe lack of reliable diagnostic labs in the country. Thus receiving healthcare from private health facilities is very expensive in Bangladesh. In the absence of health insurance or any other effective prepaid system, the entire burden is borne by the patients. A study of the Institute of Health Economics, University of Dhaka, found that the cost of receiving healthcare in Bangladesh was higher than India, Thailand, or even Singapore. 

However, the cost of medicine is a major part of out-of-pocket expenses. Irrational use of drugs is a key factor for this cost. The responsibility for this irrational use rests on the entire health system, including the patients, drug sellers, quacks, graduate doctors, specialist doctors, pharmaceutical companies, and drug administration. In Bangladesh, buying and selling medicines without a prescription is not prohibited like in other countries. Thus the system motivates people to buy and consume medicines to a huge extent. 

In Bangladesh, treatment is synonymous with consuming medication for many people, especially the poor. The presence of unnecessary medicines is often seen not only in the prescription of quacks but also ones of graduate doctors and specialist physicians. 

Aggressive marketing of pharmaceutical companies, due to apathy and lack of capability of the drug administration, is mainly responsible for aggravating the situation. Drug companies provide incentives in cash or kind to most doctors to motivate them to prescribe their medicine. Most pharmaceutical companies are desperate to sell entire volumes of their products, whether it is required for the country or not.

On the other hand, to offset the high cost of aggressive marketing, pharmaceutical companies are increasingly turning to producing more combined drugs compared to the listed drugs. Note that the government determines the price of listed drugs based on a formula, while pharmaceutical companies fix the price of the combined drugs. 

It is seen in the market that the price of combined drugs is two to ten times higher than the price of listed drugs of the same therapeutic group. Thus the production of listed drugs is constantly shrinking due to a lack of interest from pharmaceutical companies. As a result, people are being deprived of access to affordable medicines. So the expenses on medicines are increasing, which affect the overall out-of-pocket expenses.

Let us now discuss what measures the government can adopt to reduce out-of-pocket expenses. The first and foremost focus should be making all types of primary health facilities fully functional and efficient. It is necessary to strengthen the community clinics, union, and upazila-level health facilities by ensuring the supply of the required manpower and equipment. 

An effective referral system of community clinics and union health and family welfare centres has to be developed with the upazila health complex. All the vacant posts of the clinical and support staff should be filled up within a short period in the upazila health complexes and district hospitals. 

It seems that the outsourcing of cleaners is not worthwhile in the Bangladeshi context. Thus, measures should be taken by either outsourcing the cleaning services (not the cleaners) or recruiting the cleaners and other support staff permanently with the provision of transfer at regular intervals within the district. 

The upazila health complex should be renamed "upazila hospital", and its organogram should be upgraded. Note that at present there are 10 junior consultants and 11 medical officers or equivalent posts in the 50-bed upazila health complex. 

However, most of the junior consultant posts have been vacant since its inception. The junior consultants in medicine, gynaecology and obstetrics, and paediatrics are regularly posted, but they are unable to provide services due to a lack of necessary support staff and infrastructure. 

The emergency departments of upazila health complexes are poorly staffed and ill-equipped. Thus, the emergency department should be staffed with at least one emergency medical officer (EMO), one SACMO, two nurses, one medical attendant and one training attendant per shift. Therefore, the number of medical officer posts needs to be increased to a minimum of 20, of which five will be emergency medical officers. The emergency unit also should be equipped with a suction machine, oxygen cylinder, nebuliser, "mini OT", and wash equipment.

Apart from that, the required number of all clinical and non-clinical support staff including pathologists, medical technologist, aya, ward boys and cleaner should be determined and arrangements should be made for creating the posts and recruiting them accordingly. 

A public-private partnership system can be developed to ensure necessary diagnostic services. Moreover, the medicine storage and dispensing system must be strengthened by building modern storage facilities and recruiting graduate pharmacists. There is also significance to introducing afternoon shifts in upazila health complexes and district hospitals.

Moreover, a strong structure of preventive healthcare needs to be built in every upazila. First, 'Health and Nutrition Education' activities should be introduced in educational institutions from pre-primary to secondary to ensure safe food intake, health building and disease prevention. For this, a new trend has to be created. Under which 'Health and Nutrition Education' offices with proper organograms have to be established in every thana/ upazila, district and division. 

There is also a need to reorganise the IEDCR to build a strong institution like the CDC in the United States to fight against infectious diseases. It is also necessary to build a specialised university, such as University for Public Health and Infectious Diseases Control, by integrating NIPSOM, the Institute of Public Health, Institute of Public Health and Nutrition for higher education, research and training in public health, and prevention of infectious diseases.

Although the responsibility for primary health care in urban areas lies with the concerned city corporation and municipality, due to a lack of necessary infrastructure and manpower and, above all, extreme economic hardship, it is not possible for them to provide healthcare. Therefore, building an urban clinic network for every 25,000 to 30,000 people in urban areas is necessary. However, considering the demand of the city people, its structure, the number of shifts and the number and educational qualifications of service providers have to be determined.

In the case of a metropolitan city, services should be provided in two shifts. Each shift may include a medical officer, two nurses, a paramedic, a midwife, the required number of vaccinators and a security guard. There should also be strip-based diagnostic services and cancer screening services. Aalo Clinic, currently piloted by UNICEF, can be a good model for primary healthcare solutions for urban areas.  

It is also important to strengthen the District Hospitals to establish a strong hub of secondary-level healthcare in each district. It is also important to establish a branch of specialised hospitals in each division. In addition to regular salaries and allowances, it is necessary to provide incentives to physicians to discourage dual practice. Institutional practice may be introduced in Medical College Hospitals and Specialized Institute Hospitals. The costly diseases including cancer, kidney dialysis, kidney transplantation, and bypass surgery can be financed by imposing some levy on mobile phone call rates.

Moreover, private hospitals should be encouraged to operate with their own manpower. The government can purchase inpatient services for selective diseases (e.g., cancer, and kidney dialysis, which are inadequate in public health facilities, from private hospitals which operate with their own staffing. This can encourage the other private hospitals to operate with their own manpower. Moreover, it is necessary to fix the price of services by classifying private hospitals and diagnostic centres through accreditation. 

To ensure a reasonable price of medicines, the prices of all types of medicines should be determined through formulas prescribed by the government in light of the Drugs (Control) Ordinance 1982. The formula may be revised if necessary. It is important to set a clear, scientific, and accountable markup in consultation with all stakeholders to control or limit excessive, unreasonable, and unethical profits to break the vicious cycle of aggressive marketing. 

DGDA's capacity needs to be enhanced for taking appropriate measures to stop selling antibiotics without the prescription of graduate doctors. We hope that the respective bodies will come forward to implement these prescriptions.     

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