Determinants of Out-of-Pocket Payments for Healthcare in Sri Lanka

Abstract

Introduction: Sri Lanka’s healthcare system, though providing free public services, remains heavily reliant on out-of-pocket payments (OOPP), which accounted for about 40% of current health expenditure in 2022. The 2019 economic crisis worsened poverty and strained public services. Therefore, this study re-examines the determinants of OOPP using 2019 HIES data to understand changes in spending patterns. AIM: This study aims to identify the determinants of out-of-pocket healthcare payments in Sri Lanka using 2019 HIES data, while also analysing the distribution of OOPP across healthcare categories and income quintiles. Method: This study used a quantitative design with secondary data from the 2019 HIES in Sri Lanka, covering 19,911 households. A two-part model was applied: logistic regression to assess the likelihood of incurring OOPP and a Tweedie model to estimate its magnitude. Household-level variables were selected based on Andersen’s behavioural model. Results: Of the 19,911 households, 52% reported out-of-pocket healthcare payments, mainly for private medical services, medicines, and hospital charges. The relative burden of OOPP is similar across the first four quintiles. Higher income reduced both the likelihood and burden of OOPP, while members with chronic illness, economic engagement, and household expenditure were key drivers of higher likelihood and spending of OOPP. Conclusion: The study found that higher income reduces both the likelihood and burden of out-of-pocket healthcare payments. The presence of members with chronic illness and limited access to public care increases costs, highlighting the need for policies that enhance financial protection for vulnerable households.