Health debt bedevils families in need

Ten months after taking out a $200 loan with a steep interest rate from a village moneylender in Siem Reap province, a young mother still struggling to pay for her late husband’s AIDS treatment had sunk $500 into debt.

The HIV-positive widow had sold all her property to help pay for her husband’s care and felt that she would “never be able to pay back her outstanding debts”, she told researchers conducting a study on healthcare-incurred debt among poor Cambodians.

The study, published on Tuesday in the health journal BMC Health Services Research, concludes from interviews with 47 indebted Cambodian households that the government needs to regulate interest rates set by informal lenders.

“Access to formal credit suppliers, especially for the poor, is limited,” the study states. “Hence, [the poor] rely on loans with high interest rates from informal creditors. Consequently, many become heavily indebted, with considerable potential for further impoverishment.”

The researchers note that a previous study found that 62 per cent of Cambodians known to have borrowed money to pay for dengue treatment were still paying off their debts and associated interest after one year.

 

In the present study, “in response to the question of how would they pay off the debt, the large majority of the respondents said that they had no way to do so”, the researchers write.

“For those who thought they were able to repay, most would resort to selling their last piece of land, working more or borrowing from relatives and friends.”

The researchers note that health equity funds provided by Cambodia’s government and development partners often help alleviate pressures to pay off healthcare-related debts by offering poor Cambodians subsidised care from certain providers.

But 82 to 83 per cent of poor Cambodians eligible for such funds still ended up taking loans due to a frequent preference for private rather than public healthcare providers and to associated expenses not covered by the funds, such as transportation, they write.

Officials from the Ministries of Health, Social Affairs and Finance could not be reached for comment yesterday.