The reality for 926.6 million people every year

COVID-19 has had far-reaching impacts that have touched each of us in some way. Whether through lockdowns and stay-at-home orders, school closures, health concerns, loss, anticipation, or fear— we have all experienced the vulnerability that emerges with a health pandemic. However, each year, for millions of people across the world, health-related vulnerabilities are a daily reality.

926.6 million people incurred catastrophic health spending, defined as out-of-pocket health spending, exceeding 10% of the household budget (total consumption or income)”.

In 2015 when the United Nations’ Sustainable Development Goals (SDGs) were adopted, “926.6 million people incurred catastrophic health spending, defined as out-of-pocket health spending, exceeding 10% of the household budget (total consumption or income)," according to the World Health Organisation's 2019 Monitoring Report.

Medical impoverishment – where people sink below the poverty line due to healthcare costs – is an immense and increasing problem. Ill health or disease is an ever-present threat as a single incident that can push a family deeper into crisis. These families are one disease away from losing everything. 

This World Health Day, the explicit link between health and financial inclusion in reducing poverty has never been more evident.

Medical impoverishment is on the rise 

For people living in poverty, illness can be the single incident that undermines their ability to cover living costs. The direct costs of paying for health services, treatment and medicines, in addition to the indirect economic burden of lost wages can be crippling. In India, more people struggle from medical impoverishment than in any other country. In 2015, 247 million people in India “incurred catastrophic health spending” (WHO, 2019, p.31). 

COVID-19 has amplified the risk of medical impoverishment for vulnerable people, especially women and those living in rural and remote regions. With the reallocation of general health resources due to COVID-19 response, along with reduced household income and savings to access healthcare, vulnerable people are at a greater risk of illness and catastrophic out-of-pocket health expenditure. Some households have had to choose between essentials such as food and housing, or healthcare. 

As we move from COVID-19 pandemic response to health system recovery, we need to think about building resilient and equitable health systems for the future, especially because COVID-19 has disproportionately affected, and will continue to affect, the poor and vulnerable."

“COVID-19 has highlighted the critical importance of resilient health systems and infection prevention and control practices,” said Annie Wang, the Asia Health Director of Opportunity International Australia. As we move from COVID-19 pandemic response to health system recovery, we need to think about building resilient and equitable health systems for the future, especially because COVID-19 has disproportionately affected, and will continue to affect, the poor and vulnerable."

Building equitable health systems

Microfinance institutions have an established and trusted relationship with some of the most vulnerable communities and can contribute to extending financial protection in the area of health."

“Microfinance institutions are largely social businesses, providing access to capital and livelihoods through small business loans for a predominantly low-income female client base,” says Annie. "There’s a helpful link between health and microfinance or financial inclusion because microfinance institutions have an established and trusted relationship with some of the most vulnerable communities and can contribute to extending financial protection in the area of health through savings, loans or micro-insurance products.”

In addition to increasing financial protection for vulnerable communities, “there is a tremendous and underutilised opportunity to leverage the existing organised communities of disadvantaged women through the microfinance sector to tackle access to essential health services at the last mile,” says Annie. “This means that women microfinance clients can be mobilised and trained to be health leaders and facilitators in their communities, reaching some of the most remote and rural communities with health services, education and linkages. In this way, partnering with microfinance institutions can simultaneously address economic development and health empowerment.”

Inclusive and equitable access to healthcare is multi-dimensional and therefore requires a holistic response. “While some microfinance institutions have attempted standalone health interventions, like basic health education, most lack the technical expertise, confidence and catalytic capital to deliver transformative health programs,” said Annie.

“By leveraging the core assets and competencies of microfinance institutions – the backbone for social mobilization, last mile distribution network and existing trusted financial relationships – we can offer scalable and sustainable health products and programs particularly in creating more resilient health systems in the post-COVID-19 recovery,” says Annie.  

These partnerships are more important than ever to develop healthy populations and economies, and to protect those most vulnerable from falling into poverty as a result of crippling healthcare costs.

Find out more about Opportunity’s microfinance and health programs, and how you can be involved in helping us end poverty.