Economics of illness and inequality

Out-of-pocket healthcare costs in Bangladesh have risen to such an extent that they are erasing, to a large extent, whatever economic progress poorer households have managed to achieve. The latest study by the Bangladesh Institute of Development Studies (BIDS) has shown the scale of this burden, revealing that families on average now spend Tk 3,454 every month on healthcare, an amount equal to 11 per cent of total household expenditure. The burden, however, falls hardest on those least capable of carrying it. Although wealthier households spend more money in absolute terms, poorer families are forced to surrender a far larger share of their earnings for treatment, with healthcare expenses consuming as much as 35 per cent of their income compared to only 5.0 per cent among the rich. Medicines and diagnostic services have emerged as the principal drivers of this expenditure, while out-of-pocket payments continue to dominate the healthcare system at an alarming rate of 79 per cent. The study also found that many people with healthcare needs still remain untreated because treatment has simply become too expensive, which means illness is no longer only a medical concern but increasingly a question of affordability and exclusion. The problem is also unevenly distributed across the country, as rural areas consistently face higher levels of unmet need than their urban counterparts.

What makes the situation even more concerning is that the people most affected are those who are already standing at the edge of subsistence struggling to meet the most basic daily needs. For countless families, a major illness does not merely disrupt household finances for a few months but pushes them into a cycle of debt from which recovery becomes nearly impossible. Many are compelled to borrow money at high interest rates while others are forced to sell land, homes or whatever little assets they possess in order to continue treatment. In this way, healthcare costs are steadily creating new forms of poverty and insecurity. Aware of these costs, most Bangladeshis already defer medical attention until illness becomes unavoidable and forgo routine check-ups and preventive consultations altogether. However, even that deliberate restraint is not enough to shield them from financial ruin.  

There is no doubting that the nation's healthcare infrastructure has grown significantly over the years both in terms of personnel and physical buildings, yet the system continues to underperform. This is driven by both limited resources and failures of administration. The national health budget is not insignificant in absolute terms but a large share of it slips away through wastage and governance failures. Particularly, health ministry's limited institutional capacity to design and implement projects often leads to funds being directed toward unnecessary equipment and supplies that remain unused while budgets also expire unspent even as genuine healthcare needs go unmet. The damage, however, does not end there. Most people have already lost confidence in domestic healthcare services, both government and private. They seriously doubt the accuracy of diagnoses, resent being pushed toward unnecessary tests and procedures and live in fear that a hospital visit will leave them with bills they cannot afford. Clearly, these concerns point more towards a failure of administration and accountability than to limitations in capacity.

Under the conditions, what is required is not another round of incremental tweaks, but a fundamental rethinking of health policy in which healthcare is viewed as a necessity rather than a commodity. Bangladesh cannot claim meaningful economic progress if physical illness continues to strip ordinary people of their savings, assets and dignity.