Distribution and determinants of catastrophic and impoverishing health expenditure in Somalia from a calibrated microsimulation

In many parts of the world, getting sick is a medical event, but in places where health systems are fragile, it is also a financial gamble. For decades, global health experts have tracked two specific ways that medical costs can break a family. The first is when a household spends so much on doctors and medicine that they can no longer afford food, shelter, or school fees. The second is when a family that was already struggling is pushed even deeper into poverty because of a single medical bill. These are not just accounting problems; they are barriers that stop people from seeking help, leading to worse health outcomes and deeper cycles of deprivation. In Somalia, a nation still recovering from decades of conflict and displacement, these risks are magnified. The country relies heavily on families paying for care directly at the moment they need it, with very little help from a shared insurance pool or government safety net. Because no one has ever counted the exact number of families falling into this trap, the full scale of the crisis has remained hidden.

To fill this gap, a researcher at the RIYAADA Institute for Leadership & Governance in Mogadishu built a digital mirror of Somali society. Since there were no existing records of individual household spending to analyze, the researcher created a synthetic dataset of 1,350 computer-generated households. These virtual families were carefully calibrated to match real-world data on population size, wealth, and living conditions across Somalia's four main ways of life: city dwellers, rural farmers, nomadic herders, and people living in internally displaced person settlements. By feeding this simulated population through standard global health models, the study produced a clear picture of who is most likely to face financial ruin when they get sick, offering a roadmap for future policy without needing to wait for a new national survey.

The results reveal a stark reality: one in four households in this simulation faced a catastrophic health expense, meaning their medical bills ate up a dangerous portion of their total income. The burden was not shared equally. It fell hardest on the most vulnerable. Families living in internally displaced person settlements faced the highest risk, with nearly 39 percent of them crossing the threshold into financial crisis. Nomadic households, who must travel long distances to reach clinics, also faced steep odds, as did the poorest families overall. In fact, the poorest families were more than three times as likely to suffer a catastrophic expense as the richest families. The study found that paying for health care is effectively a regressive tax, where those with the least money surrender the largest share of their resources to stay alive.

Beyond the immediate shock of a large bill, the payments are actively pushing people into poverty. Before any medical costs were considered, the poverty rate in the simulation stood at 44.4 percent. After accounting for out-of-pocket health payments, that figure rose to 49.0 percent. This means that health spending pushed an additional 4.6 percent of households below the poverty line, turning a manageable struggle into a state of destitution. The study suggests that families are forced to cope by selling productive assets like livestock, borrowing money from relatives, or cutting back on food and education. These are not just temporary fixes; they are strategies that undermine a family's ability to earn a living in the future, trapping them in a cycle where illness leads to poverty, and poverty makes future illness harder to treat.

Certain factors emerged as powerful drivers of this hardship. The single strongest predictor was chronic illness. Households with a member suffering from a long-term condition were more than four times as likely to face a catastrophic expense compared to those without. Unlike a sudden injury that might be a one-time cost, chronic conditions require ongoing payments for medicine and checkups that accumulate over time, draining resources that could otherwise sustain the family. Another major driver was childbirth. Families that gave birth in a medical facility nearly doubled their odds of financial crisis compared to those who did not, highlighting a painful contradiction where following medical advice to seek safe delivery results in financial punishment.

The study also highlighted how geography and social status shape risk. Being a female-headed household increased the odds of financial hardship, as did living in a displaced settlement or being nomadic. These groups face unique barriers, such as the cost of travel, the lack of nearby facilities, and the instability of their livelihoods. Interestingly, the tiny fraction of households that had any form of health insurance or prepaid coverage showed a lower risk of financial crisis, though the numbers were too small to be statistically certain. This suggests that even limited insurance offers a shield, but the current coverage in Somalia is so thin that it leaves almost everyone exposed.

The researcher emphasizes that these findings are projections based on a carefully constructed model, not a direct count of real-world events. However, the patterns are consistent with what is known about health financing in fragile settings. The study does not claim to have solved the problem or provided a final census of the poor. Instead, it offers a plausible scenario that identifies exactly where the cracks are. It shows that the current system of paying for care at the point of service is failing the displaced, the nomadic, the chronically ill, and the poor. The path forward, according to the analysis, requires moving away from direct payments and toward pooled prepayment systems. This would mean creating a national fund where everyone contributes according to their ability, so that when a family gets sick, the cost is shared rather than shouldered alone. Specific steps, such as exempting chronic disease patients and mothers from fees and subsidizing insurance for the most vulnerable, could target the groups identified as most at risk. By understanding who is suffering and why, policymakers can design a system that protects the most fragile families from being pushed into poverty by the very care they need to survive.