Healthcare Utilisation Inequality and the Hidden Burden of Out-of-Pocket Expenditures in Sabah

Abstract

Malaysia has made significant progress in reducing financial hardship from out-of-pocket (OOP) health expenditures, aligning with Sustainable Development Goal 3.8.2 on universal health coverage. However, persistent income inequality, particularly in Sabah where nearly 20% of individuals live below the poverty line, continues to hinder equitable access to healthcare. This study draws on data from the National Health and Morbidity Surveys (NHMS, 1996 to 2023) and the Household Income and Expenditure Surveys (HIES, 2014 to 2022) to assess income-related inequalities in healthcare utilisation and financial protection. Analyses were conducted using STATA 18. NHMS data were used to evaluate disparities in service use across income groups, while HIES data captured catastrophic and impoverishing health expenditures. Catastrophic expenditure was defined as health spending exceeding 40% of a household’s capacity to pay, and impoverishment as OOP payments that pushed households below the basic needs threshold. In 2023, inpatient care remained concentrated in the public sector, while outpatient services were more evenly utilised across sectors. Nevertheless, concentration indexes indicated rising pro-rich inequalities. Between 2.41% and 3.10% of households experienced catastrophic payments. An additional 2.0% to 3.8% were impoverished. Targeted and inclusive financial protection strategies are essential to close these gaps and achieve equitable health coverage.