JRHS 2009; 9(2): 36-40

Copyright © Journal of Research in Health Sciences

Catastrophic Health Expenditures in Kermanshah, West of Iran: Magnitude and Distribution

Karami M(MSc)a,  Najafi F( MD, PhD)a, Karami Matin B( PhD)b

aKermanshah Health Research Center (KHRC), Kermanshah University of Medical Sciences, Iran

bHealth Care Management, Kermanshah Health Research Center (KHRC), Kermanshah University of Medical Sciences, Iran

*Corresponding author: Dr Manoochehr karami, E-mail: manouchehriri@yahoo.com,

Received: 19 Apr 2009; Accepted: 29 Aug 2009


Background: Health policy makers are concerned about protecting people from catastrophic health expenditures and subsequent impoverishment.  This study aimed to describe the magnitude and distri­bution of catastrophic health expenditures in Kermanshah western Iran.

Methods: In this descriptive study, during May 2008, 189 households were chosen by “Systematic Random sampling” among the community of Maskan in Maskan Center for Population. After getting the informed consent forms signed, data ere collected using a questionnaire by interviewing the head of the families. The cut-off point for catastrophic expenditure was defined as health expenditures over 40% of households capacity to pay.

Results: From a total of 189 households, 22.2% (42) households (95% CI 16.3%- 28.1%) incurred catastrophic health expenditures. Out of 42 households, for 11.9%, the head of family was female. 40.5 % had one member younger than 12 years old, 26.2% had one member older than sixty years old, and 9.5% were households with at least one member with chronic condition. In addition, 19% were uninsured. In addition, because of financial burden of health expenditures 21.4% of the households sold their jewels, 16.7% used up their savings and 47.6% were in debt.

Conclusion: Compared to 2% of general population facing catastrophic health expenditure, 22.2% was a high proportion. Our study revealed the importance of protecting households against the cost of ill-health.

Keywords: Catastrophic health expenditures, Households financing contribution, Iran        


Health systems have three fundamental ob­jectives: improving the health of the popula­tion; meeting peoples expectations and pro­viding financial protections against the costs of ill-health (1). The fairness of health fi­nancing as a subset of the three main goals of health systems is based on the notion that every household should pay a fair share (1). Catastrophic health expenditures occur when households need to spend an important frac­tion of their net income on health care; some of them being pushed into poverty and oth­ers refuse to continue to get the care needed (1).

According to World Health Organization (WHO) definition, “households with catas­tro­phic expenditures were defined as those with health expenditures over than 40% of house­hold's capacity to pay. The health financing contribution of a household (HFCh) is defined as the ratio of total house­hold spending (HS) on health and its total ca­pacity to pay. Ca­pacity to pay was defined as total non-food ex­penditure.

HFCh can be summarized in the following for­mula:

(Please note that the subscript h denotes house­hold level data)

The numerator corresponds to total house­hold health expenditure (HSh) which is the sum of prepayment and out-of-pocket (oop) payment to the health system. It can be sim­pli­fied into the following formula:

HSh= Prepayh+ ooph

The denominator is a measure of the house­hold's permanent above subsistence income es­timated for a household's total expenditure (EXPh) in­cremented by adjusted tax pay­ments used on health not already included in total expendi­ture such as income tax and prop­erty tax (aTaxh) and net of food expendi­ture (Foodh)”(2).

The impact of catastrophic payments on people may lead to cut down on necessities such as food and clothing, or are unable to pay for their children's education. WHO has proposed that health expenditure is viewed as catastrophic whenever it is greater than or equal to 40% of a households non-subsis­tence income, i.e. income available after ba­sic needs have been met. However, countries may use a different cut-off more consistent with their national health policies (3).

Every year, approximately 44 million house­holds, or more than 150 million individuals, throughout the world face catastrophic ex­penditure, and about 25 million households or more than100 million individuals are pushed into poverty, mainly because of high expenditure for health care needed (3). Costs of health care services might be a direct cost such as those for medicines or laboratory tests or an indirect one such as transport and food. WHO reported that 2% of the Iranian households incurred catastrophic health ex­penditures and at least 1% of those suffer from impoverishment (1).

This study aimed to describe the magnitude and distribution of catastrophic health ex­penditures in Kermanshah, western Iran.


We conducted a descriptive study during May 2008 and entered 189 households who were chosen by “Systematic Random sam­pling” among residents of Maskans popula­tion- based research center (Maskan Center) in Kermanshah, Iran. This center has a popula­tion larger than 18000 people with a divers socioeconomic status making our sample rep­resentative of Kermanshahs population. After completing informed con­sent form, data were collected using a ques­tionnaire by interviewing the head of the family. A catas­trophic expenditure was de­fined as health ex­penditures over 40% of households capacity to pay.

To estimate the catastrophic health expen­diture, we used WHO methodology for esti­mating Household Financing Contribution (HFC) (2). The HFC is defined as the ratio of total Household Spending (HS) on health to the total capacity of household to pay. The numerator (HS) included all payments to­wards the financing of the health system through social security contribution, private insurance, and out-of-pocket payments. The total capacity to pay defined as total of non food expenditures. Using SPSS software (ver­sion 12.00) data were analyzed.


From a total of 189, females accounted for 12.7% of the family heads. The mean age± standard deviation of head of the families was 48.96±12.86 yr and 75.1% of the fami­lies were covered by at least one type of insurance. A total of 22.2% (95% CI 16.3%- 28.1%) of the households (42 households) faced catastrophic health expenditures.

From those faced with catastrophic expen­diture, the female family head came out at 11.9%. Around 40.5% had one member younger than 12 yr old, 26.2% had at least one mem­ber older than 60 yr old, 9.5% of households had at least one mem­ber with chronic condi­tion and 19% were uninsured. Because of fi­nancial burden of health expenditures, 21.4% of the house­holds sold their jewelries, 16.7% used up their savings, 47.6% borrowed money from someone other than a friend or family and 19% were supported by extended family mem­bers or friends from outside the house­hold. Table 1 shows the distribution of demo­graphic variables and other baseline charac­teristics in details among households who either incurred or did not faced catastrophic payments.

Table1: Distribution of baseline characteristics among households according to the status of health care payments*


Households with catastrophic payments

(n= 42)

n (%)

Households without catastrophic payments

(n= 147)

n (%)

All households

(n= 189)

n (%)

Age (mean ± SD)

49.74± 11.68

48.73± 13.20

48.96± 12.86

Sex (Female %)       

5 (11.9)

19 (12.9)

24 (12.7)

One family member younger than 12 yr old

17 (40.5)

57 (38.8)

74 (39.2)

One family member older than 60 yr old

11 (26.2)

33 (22.4)

44 (23.3)

one family member with chronic condition

4 (9.5)

6 (4.1)

10 (5.3)

Insurance coverage

34 (81)

108 (73.5)

142 (75.1)

Complementary insurance coverage

8 (19)

29 (19.7)

37 (19.6)

Households sold their jewels

9 (21.4)

32 (21.8)

41 (21.7)

households who used up their savings

7 (16.7)

23 (15.6)

30 (15.9)

Households borrowed money from some­one other than a friend or family

20 (47.6)

73 (49.7)

93 (49.2)

Households who supported by family mem­ber/friends from outside the household

8 (19)

21 (14.3)

29 (15.3)

Household size (mean± SD)

4.45± 1.74

4.22± 1.61

4.27± 1.64

*All P values for comparison between households with or without catastrophic health expenditure were> 0.05

Although no statistically significant, house­hold with catastrophic health expenditure were more likely to have either a family member younger than 12 yr old or older than 60 yr old (Table 1). In addition, such fami­lies were more likely to have a member suffering from chronic condition and use their saving.

Table 2: Proportion of households with catastrophic payments among some Asian countries


Point estimate

80% Confi­dence Interval



6.43- 7.86



1.01- 1.41



0.38- 0.86



0.10- 0.25

Republic of Korea


1.65- 1.80



0.70- 0.89



1.46- 1.86

Present study

(West of Iran)


18.31- 26.57


Our results showed that 22.2% of the house­holds incurred catastrophic health expendi­tures which were relatively high compared to similar studies (4-7). For example, in Burk­ina Faso it is estimated that 6-15% of the households incurred catastrophic payments (8). In a multi-center study among 59 coun­tries, proportion of households facing catas­trophic payments varied from less than 0.01% in Czech Republic and Slovakia to 10.5% in Vietnam. Two groups of countries had relatively high rates of catastrophic health expenditure: countries in transition, e.g., Azer­baijan, Ukraine, Vietnam, Cambo­dia and Latin American countries, e.g., Ar­gentina, Brazil, Colombia, Paraguay, Peru (3).

However, there are several issues regarding the comparison between our estimation with re­ports from elsewhere. First, this proportion might have been estimated even higher if we had not used a conservative cut-off for catas­trophic expenditure (> 40% of their available in-­come). Second, information bias toward over­es­timating the total health spending and/or un­derestimating the total available in­come are errors that might make the compari­son across different countries inva­lid. Finally, one study (2) used conservative definition of catastro­phic payments, i.e. it used a higher threshold than earlier studies, it is worth mentioning that the health income and expenditure surveys do not typically seek information on the indirect costs of seek­ing care, such as those associated with transport, food, and accommodation, or lost earnings associated with illness. Accord­ingly, the estimates from such studies (includ­ing ours) might even provide an under­estimation of the financial conse­quences of out-of pocket payments. These three factors and differ­ences in methodology e.g. choosing different cut- off points might de­scribe the observed vari­ability in reported the proportion of house­holds with out-of pocket payment for health care (4, 9, 10).  Whether our estimation might be an underesti­mation or overestimation of real bur­den of health expenditure, it is con­sidera­bly different from WHO estimation for Ira­nian nation (2%) and other countries with similar economical status. For example, Sesma-Vázquez S et al. (4) defined catastro­phic pay­ments as those with health expendi­tures over 30% of their ability to pay and they reported that 3.8% of the households in Mexico in­curred catastrophic health expendi­tures. Table 2 shows the proportion of households with catas­trophic payments among some Asian coun­tries with 80% CI (3).

Although factors such as the availability of health services requiring out-of-pocket pay­ments, low household capacity to pay and lack of prepayment mechanisms for risk pool­ing are most influential factors, most of the ob­served variations in catastrophic health expen­diture among countries are attributed to other determinants (2). The fact that the families are headed with old people, females and those with disabilities might increase the risk of fac­ing catastrophic health expendi­ture. For exam­ple, in two US studies, (11, 12) households headed by older people, peo­ple with disabili­ties, the unemployed or poor people, and those with reduced access to health insurance were more likely to be af­fected than other house­holds. In Georgia, the results of a survey un­dertaken after the transi­tion to a decentral­ized, market-driven system showed that 19% of house­holds seek­ing care had to borrow money or sell per­sonal items to pay, and that 16% were un­able to afford the medications prescribed (3). Our estimation in showing similar dif­fer­ences (although non-statistically significant) be­tween families with or without catastro­phic health expenditure is similar to the re­ports from elsewhere (3, 9, 5).

The real burden of catastrophic health expen­diture need to be further investigated (13, 14). In fact, many poor households will choose to not seek care rather than become im­poverished. In addition, some people may cut down on other necessities such as food, clothing, or their children's education. The findings of this report need to be further exam­ined by doing similar stud­ies in other de­prived provinces. In addi­tion further analyti­cal studies help to under­stand about contribution of determinant of out-of pocket payments.


We would like to thank all of subjects en­rolled in this research for their collabora­tions. Support was provided by Kermanshah University of Medical Sciences. The authors declare that they have no conflicts of inter­est.  


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