Background
This study examines health-related "hardship financing" in order to get better insights on how poor households finance their out-of-pocket healthcare costs. We define hardship financing as having to borrow money with interest or to sell assets to pay out-of-pocket healthcare costs.

Methods
Using survey data of 5,383 low-income households in Orissa, one of the poorest states of India, we investigate factors influencing the risk of hardship financing with the use of a logistic regression.

Results
Overall, about 25% of the households (that had any healthcare cost) reported hardship financing during the year preceding the survey. Among households that experienced a hospitalization, this percentage was nearly 40%, but even among households with outpatient or maternity-related care around 25% experienced hardship financing.

Hardship financing is explained not merely by the wealth of the household (measured by assets) or how much is spent out-of-pocket on healthcare costs, but also by when the payment occurs, its frequency and its duration (e.g. more severe in cases of chronic illnesses). The location where a household resides remains a major predictor of the likelihood to have hardship financing despite all other household features included in the model.

Conclusions
Rural poor households are subjected to considerable and protracted financial hardship due to the indirect and longer-term deleterious effects of how they cope with out-of-pocket healthcare costs. The social network that households can access influences exposure to hardship financing. Our findings point to the need to develop a policy solution that would limit that exposure both in quantum and in time. We therefore conclude that policy interventions aiming to ensure health-related financial protection would have to demonstrate that they have reduced the frequency and the volume of hardship financing.