Who suffers most?

In Somalia, families pay for health care out of pocket at the moment they can least afford it. New analysis shows that the resulting hardship is not random. It is concentrated, patterned, and therefore targetable.

✍️:

Dr Abdulrazaq Yusuf Ahmed  

MPH, MSc(HM), PhD (Health Economics), PhD (Demography & Social Sciences)  

Health Systems Expert | Public Sector Transformer | Academic Researcher  

Director General, National Health Insurance Authority (NHIA)  

Federal Ministry of Health, Somalia  

Founder of RIYAADA Institute for Leadership and Governanve

Address: Via-Londra Street; Hamarjabjab District; Mogadishu; Somalia  

ContactsEmail: drjalaal@nhia.gov.so; drjalaal@hotmail.com; drjalaalahmed@gmail.com; drjalaal@riyaadaacademy.com

Phone: +252 615 572 605; +252 616 258 604  

Web: drjalaaludiin.com  

Research: ORCID | Scopus: 57222062380 | WoS: ADD-3214-2022  

Links: RUGSAN | RIYAADA | LinkedIn

Who Suffers Most BLOG POST

.

A child develops a fever that will not break. The family weighs the cost of travel against the risk of waiting. They go. They pay for the consultation, the medicines, the tests, and the ride home. To cover it, they sell a goat.

The child recovers. The household does not. The animal that was sold was not a luxury; it was a productive asset, part of the machinery that generates next year’s income. The illness lasted a week. Its economic shadow lasts years.

This is what health financing looks like when risk is barely pooled. In Somalia, out-of-pocket payments account for roughly 45% of current health expenditure, compared with a global average near 18.6%. Formal insurance reaches a small, mostly urban minority. For nearly everyone else, illness is paid for in cash, at the counter, on the day.

We know this at the level of the national accounts. What we have not known, with any precision, is who is being crushed by it. That is the question this analysis was built to answer.

THE INSTRUMENTS

Two rulers, one uncomfortable answer

There are two accepted ways to decide when a health bill has become a catastrophe, and they answer slightly different questions.

The budget-share ruler asks what proportion of everything a household spends goes to health. Cross 10% and you are in trouble; cross 25% and you are in serious trouble. It is blunt, transparent, and internationally comparable — which is why it dominates global monitoring.

The capacity-to-pay ruler asks a sharper question: once a family has fed itself, what is left, and how much of that does health consume? Food is not discretionary. For a household spending three-quarters of its income on staples, a bill that looks modest against total consumption can wipe out everything else — the school fees, the rent, the small buffer that separates coping from collapse. The conventional trigger is 40% of what remains after food.

Poor households often look less exposed on the first ruler and far more exposed on the second. In Somalia, the two rulers converge at the national level — 25.0% and 25.6% — and that convergence is itself the finding. Health payments are not merely large relative to household budgets. They are devastating relative to the narrow margin households actually control.

GEOGRAPHY

Hardship has an address

The national average is the least useful number in this study. Once disaggregated, a clear gradient appears, running from the city outward to the settlements and grazing routes.

Almost one in two displaced households crosses the capacity-to-pay threshold. And the obvious explanation — that displaced people are simply poorer — turns out to be only part of the story.

Even after accounting for wealth, household size, chronic illness, and other factors, displacement still raises the odds of catastrophe by 90%. Living on the move raises them by 66%. Displacement and mobility are not just proxies for poverty. They are structural disadvantages in their own right: distance from fixed facilities, transport and lodging costs that never appear on a fee schedule, missing documentation, insecure livelihoods, and no assets to fall back on.

The policy consequence is direct. A financial protection scheme that targets only by income will systematically miss the people it most needs to reach. Targeting has to be geographic and status-based as well as economic.

INCIDENCE

A tax that rises as income falls

Run the same analysis across wealth quintiles and out-of-pocket financing shows its true shape. It is a tax on being ill, and it is steeply regressive.

Wealthier households absorb a health bill through savings, salary, or family support. Poorer households absorb it by eating less, borrowing on harsh terms, selling income-generating assets, or not seeking care at all. The same financing mechanism, applied to everyone equally, produces radically unequal welfare consequences. That is the definition of a regressive system.

DETERMINANTS

What actually drives a household over the edge

Descriptive gradients tell you where hardship clusters. A regression tells you what is doing the work once everything else is accounted for. Here the picture sharpens considerably.

The chronic illness trap

A household with a chronically ill member has more than four times the odds of catastrophic spending. This is not surprising, but it is decisive. Acute illness is a shock; chronic illness is a subscription. Every month brings the same medicines, the same monitoring, the same transport, the same consultation — and in a system with no prepayment, every month brings the same bill.

That is the mechanism behind the medical poverty trap. Illness depletes resources; depletion restricts future access; restricted access worsens the illness. In a system like this, diabetes and hypertension are not just clinical conditions. They are slow-motion financial diagnoses.

The maternity penalty

Here is the finding that should trouble health ministries most. A facility-based birth in the previous year doubles a household’s odds of catastrophic expenditure.

Consider what that means. Global health policy has spent two decades persuading women to seek skilled birth attendance, and rightly so — it saves lives. Somalia has invested heavily in that message. Yet when a family follows the advice, the system can hand them a bill large enough to sink them.

Evidence from across low- and middle-income countries is consistent: removing user fees for maternal services raises utilisation and improves financial protection simultaneously. There are few cheaper wins available.

Who is holding the household together

Female-headed households carry 44% higher odds of catastrophe. Each additional household member adds 11%. These are not exotic risk factors — they describe an enormous share of the Somali population, and they compound. In displacement settlements, 55% of households are female-headed and 62% sit in the poorest quintile. The vulnerabilities stack.

CONSEQUENCES

What families do when the bill arrives

Catastrophic expenditure is a threshold crossed. Impoverishment is what happens on the other side.

And these are only the households the poverty line can see. Ask how the bill was paid and a second, larger picture emerges: among households that spent catastrophically, roughly 60% financed care through distress — selling livestock or productive assets, borrowing from relatives, taking credit from merchants, accumulating debt.

Distress financing is not a coping strategy. It is a transfer of cost from the present to the future. Livestock sold today is income foregone for years. Debt taken at the clinic door is a claim on every harvest that follows. For a displaced household with nothing to sell, the adjustment happens in the only account left: food, school, delay, or simply not going.

RESPONSE

From evidence to instrument

Where to start

Protection is cheapest where risk is most concentrated. Three first moves carry the highest return per shilling:

None of these steps require institutions Somalia lacks. They require using the institutions already on paper for a clear purpose: protecting households before illness becomes poverty.

CONCLUSION

The answer is a roadmap: out-of-pocket financing in Somalia functions as a tax on illness. It is paid by the sick rather than the healthy, ignores ability to pay, and arrives precisely when earning capacity collapses. This system pushes one quarter of households into catastrophic spending and drives an additional 4.6% below the poverty line.

But the burden is not random, and that is the most useful finding in this analysis. It falls hardest on displaced households, families on the move, households living with chronic illness, women running households alone, the poorest fifth, and women who gave birth in a facility after doing what the health system asked of them.