Out-of-pocket healthcare: Who really cares about your well-being?
Approximately 72.5% of total health expenditures in Bangladesh are out-of-pocket, meaning that nearly three quarters of the healthcare costs are paid directly by individuals
Over the years, Bangladesh has made significant strides in the healthcare sector, particularly in reducing maternal and child mortality rates. At the same time, the country's pharmaceutical industry has experienced impressive growth, successfully meeting domestic demand and expanding into export markets.
However, one area of concern remains the rising out-of-pocket (OOP) healthcare expenditure.
It refers to the direct healthcare costs borne by individuals that are not covered by the government, employers, or insurance. According to data from the World Development Indicators (WDI), approximately 72.5% of total health expenditures in Bangladesh are out-of-pocket, meaning that nearly three quarters of the healthcare costs are paid directly by individuals.
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One reason for the high out-of-pocket expenditure is the absence of health insurance coverage. Another key issue in the country's health sector is the government's low budget allocation. Moreover, the share of development expenditure in the health sector remains very low, weakening the infrastructural capacity to address complex diseases in Bangladesh. As a result, many patients seek treatment abroad, leading to a significant outflow of resources.
A report from India's Ministry of Tourism shows that between 2018 and 2022, on average, more than 50% of tourists travelling to India from Bangladesh did so for medical purposes. In fact, in 2021, Bangladeshi medical tourists accounted for around 77.6% of India's total medical value tourism.
Bangladesh is on the verge of graduating from the LDC list, while the deadline for achieving the SDG targets is also approaching. Although there are ongoing discussions about whether the country should proceed with LDC graduation, the rising out-of-pocket expenditure has become a growing concern for policymakers amid this transition period.
Way towards a holistic healthcare reform
Given the dynamic context, it is essential to prioritise the effective utilisation of the country's health budget. Beyond the issue of low allocation, inefficient use of funds remains a major concern.
A 2022 study by the Bangladesh Institute of Development Studies (BIDS) found that around 60% of leadership positions in various health sector organisations were filled based on political involvement or recommendations, highlighting how political bias often influences appointments within health governance.
According to the Global Health Security Index 2023, which is also cited in the Health Reform Commission report, Bangladesh ranks 113th out of 195 economies in terms of health governance. Weak governance in the health sector often results in projects being selected based on political connections or personal networks, ignoring their feasibility. As a result, a significant amount of money is wasted.
We need to shift away from urban-centred development. Even in 2025, district- and division-level hospitals remain poorly equipped to treat serious diseases. In many cases, medical professionals exploit loopholes or use bribes to avoid postings in suburban or rural areas, resulting in a severe shortage of healthcare personnel in those regions.
There is a need to introduce Universal Health Coverage (UHC) in the economy; implementation may start by addressing the vulnerable community first — those who work in low-paying jobs or live in vulnerable areas.
We need to leverage our existing digital capacity to modernise healthcare facilities. Since many people already have access to digital devices, effectively utilising the existing mobile ecosystem could play a vital role in ensuring a more integrated digital healthcare system.
The use of modern technology in the healthcare system has also been emphasised in the interim government's Health Reform Commission report. The report highlights how digital connectivity could transform the country's healthcare infrastructure and suggests policies for reforming the healthcare sector, which will play a role to address the rising OOP.
However, policies on paper alone are not enough—they must be implemented. Yet, there is a lack of coordination among regulatory authorities. Numerous bodies are responsible for enforcing rules and policies, but due to bureaucratic inefficiencies, these regulations are often poorly implemented.
It is high time to address the halt in the registration of new medicines, which has been caused by instability within the Directorate General of Drug Administration (DGDA) following the fall of the previous regime. This highlights another critical issue: political interference in various government and semi-government institutions in developing economies like ours.
As the nation is heading toward a national election, it is feasible to say that the policies that have been drafted in the Health Reform Commission cannot be implemented properly during this short time. However, some of the recommendations to reform the health sector should not be discarded. Rather, those who will come into power should focus on implementing these policies.
Sayed Arafat Zubayer is a Programme Associate at Centre for Policy Dialogue (CPD). Email: zubayer@cpd.org.bd
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
