Financial hardship in health and components, % of the population

Health system

Financial hardship due to out-of-pocket (OOP) health spending reflects the extent to which people’s direct health payments reduce their ability to meet basic needs or afford other goods and services. Because OOP health payments are made at the point of care without risk pooling, they include formal and informal payments for any health service or health product, and can occur in any health system and affect people at any income level. SDG indicator 3.8.2 is used to track financial hardship in health. Monitoring this indicator is essential to assess the effectiveness of financial risk protection mechanisms, a core dimension of universal health coverage (UHC) and a key target (3.8) of the Sustainable Development Goals.

For more information, please see SDG 3.8.2 metadata description, section 4.a.

Proportion of the population with positive out-of-pocket household expenditure on health exceeding 40% of household discretionary budget.

The discretionary household budget is defined as total household consumption expenditure or income minus the societal poverty line (SPL). The societal poverty line is the higher of two thresholds: an absolute floor corresponding to the international poverty line or a higher country-specific value. The SPL is expressed in purchasing power parities (PPPs) (see the following section “Method of estimation”).

This definition was adopted in March 2025 as part of the 2025 SDG Comprehensive Review Process.

The indicator includes two components:

1. Impoverishing OOP health spending: proportion of the population whose OOP health spending exceeds 100% of discretionary budget. Such spending is incurred either by people living in poverty, who have no discretionary budget even before accounting for health spending, or by people who have no discretionary budget after OOP health payments are made. In both cases, these individuals cannot afford basic needs.
2. Large (but not impoverishing) OOP health spending: proportion of the population whose OOP health spending exceeds 40% but remains below 100% of their discretionary budget. This spending does not compromise the ability to meet basic needs but substantially reduces the ability to consume other goods and services.

For more information, see SDG 3.8.2 metadata description, section 2.

Financial risk protection, out-of-pocket health expenditure, out-of-pocket health payments, catastrophic out-of-pocket health spending, impoverishing out-of-pocket health spending, universal health coverage

Location (country, territory, or area), place of residence, quintiles of household welfare measure, household head’s age or sex, household age composition (see SDG 3.8.2 metadata description, section 5 on disaggregation).

The indicator is calculated as the proportion of individuals (or households, weighted by population) whose positive out-of-pocket (OOP) health expenditure exceeds 40% of their household discretionary budget. For the exact formula, please see SDG 3.8.2 metadata description, section 4.c.

To identify impoverishing OOP health spending, replace 40% in the above definition by 100%.

To identify large OOP health spending, take the difference between the proportion of individuals facing financial hardship and the proportion of individuals facing impoverishing OOP health spending.

The discretionary household budget corresponds to the daily per capita total household consumption expenditure or income minus the societal poverty line (SPL). Using 2017 purchasing power parities (PPPs), SPL = max ($2.15 a day per day; $1.15 a day per day + 50% of median daily total household consumption expenditure or income (net of daily per capita OOP health spending). For more information, see SDG 3.8.2 metadata description, section 4.c.

Impact

At the location level (country, territory or area), the indicator and its two components are estimated directly from micro-level data (see section “Preferred data sources”). No imputation is attempted.

In some instances, estimates are produced by the WHO and/or the World Bank, in consultation with, or independently of, national counterparts. For more information on adjustments, harmonization procedures, quality assessment and validation, please see SDG 3.8.2 metadata description, sections 3.b, 4.d to 4.k.

The regional and global estimates correspond to the total number of people across all locations in that region or globally with positive out-of-pocket household expenditure on health exceeding 40% of the household discretionary budget, divided by the total number of people in that region or the world.

To compute regional and global aggregates for a common reference year, survey-based country estimates are first “lined-up” using a combination of interpolation/extrapolation (when there are at least two survey-based estimates available around the reference year); econometric modelling (one survey-based estimate available around the reference year); and imputation based on regional medians (no survey-based estimates available around the reference year) (see also SDG 3.8.2 metadata description, sections 4.f and 4.g).

Percent (%) of the population in the relevant location or group

N/A

Every 2 years, following a country consultation conducted by WHO (see SDG 3.8.2 metadata description, section 3.c to 3.g).

Every 1–5 years, depending on the implementation of population-based household expenditure surveys led by national statistics offices (see SDG 3.8.2 metadata description, section 3.d and 3.c).

To fully understand progress towards UHC within the SDG monitoring framework, this indicator should be monitored jointly with SDG indicator 3.8.1 on coverage of essential health services. Financial hardship induced by OOP health spending also deters efforts to eradicate poverty and reduce inequalities between and within countries, and as such, other relevant SDG indicators include 1.1.1; 1.2.1; 10.1.1; 10.2.1.

uhc_stats@who.int

Dr. Gabriela Flores

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This indicator has some limitations: the definition adopted in 2025 is sensitive to the choice of the poverty line used to monitor the cost of basic needs (SPL, national poverty lines, other). The societal poverty line threshold values depend on purchasing power parity conversion factors, which the World Bank updates from time to time. Hence, their values change as the reference year changes. To convert the SPL into local nominal currency units, it is necessary to have consumer price index data.

Some people seeking care face barriers to access due to financial constraints, acceptability issues, service unavailability, or accessibility. Those unable to overcome such barriers (financial and nonfinancial) will not report any health spending, thereby reducing the indicator’s rate.

For other limitations inherited from the previous SDG 3.8.2 definition, please see section 4.b in the SDG 3.8.2 metadata description. On comparability/deviation from international standards, see section 6 in the SDG 3.8.2 metadata description.