Background: Analysing disease-specific impoverishment impact of out-of-pocket (OOP) payments for health care is crucial for priority setting in any informed policy discussion. Lack of evidence, particularly in the Bangladesh context, motivates our paper.

Objective: To examine disease-specific impoverishment impact of OOP payments for health care.

Methods: The paper estimates the poverty impact of OOP payments by comparing the difference between the average level of headcount poverty and poverty gap with and without health care payments. We used primary data drawn from 3,941 households, distributed over 120 villages of seven districts in Bangladesh during August–September 2009.

Findings: We find that OOP outlays annually push 3.4 % households into poverty. The corresponding figures for those who had non-communicable diseases (NCDs), chronic illness, hospitalization and catastrophic illness were 4.61, 4.65, 14.53 and 17.33 %, respectively. Note that NCDs are the principal reason behind the latter two situations (about 88 % and 85 % of cases, respectively). Looking into individual categories of NCDs we found that major contribution to headcount impoverishment arose out of illnesses such as cholecystectomy, mental disorder, kidney disease, cancer and appendectomy. The intensity of impoverishment is the largest among the hospitalized patients, and more individually among cancer patients.

Conclusions:The poverty impact of OOP outlays for health care, in general, is quite high. However, it is especially high for NCDs, particularly for chronic NCDs and those requiring immediate surgical procedures. Hence, these illnesses should be given more priority for policy framing. In addition to suggesting some ex-ante measures (e.g. raising awareness regarding the risk factors causing NCDs), the paper argues for reforms to enhance efficiency in the public health care facilities and increasing the quality of public health care.