Catastrophic health‐care payments and multidimensional poverty: Are they related?

The negative impact of health‐related out‐of‐pocket (OOP) payments is a well‐known problem in low and middle‐income countries (LMICs). Cross‐sectional analysis reveals that households use different coping mechanisms to mitigate or overcome the effect of OOP payments, but little is known from a longitudinal perspective. We explore this link using panel data for Colombia, Mexico, India, Malawi, Nigeria, Uganda, and Tanzania. Using a fixed‐effect model, we computed the association between multidimensional poverty (MP) and facing catastrophic health payments (CHP) using a capacity‐to‐pay approach. We estimated different heterogeneous effects, including variables such as area of residence, facing CHP, being poor in the first wave, and facing CHP in period two. While using cross‐sectional data, we found that the association between CHP and MP is present for six of the seven countries; it is not the case for the time variation in most of them. The results provide evidence that OOP induce a long‐term impact on MP only in Colombia, India and Nigeria. In the last two countries, the levels of poverty and CHP were the highest of all seven, and the association between both situations was found by using different poverty cutoffs and thresholds to define CHP.