Bangladesh has made notable progress on many health indicators. However, out-of-pocket (OOP) healthcare costs continue to burden patients and their families as the need for public spending in the health sector grows. This article examines the effects of selected variables on OOP healthcare expenditure which have not previously been well researched.

Data from the Bangladesh Household Income and Expenditure Survey (HIES) 2010/2011 (n = 4025) was analyzed. This study applied the double-hurdle model, the Tobit Model, and the truncated regression model to analyze the effects of selected independent variables on OOP healthcare expenditure.

The presence of chronic illness, or any symptoms of illness, make people spend more on healthcare. People tend to expend more on those healthcare service providers who provide sufficient consultation time. If the healthcare service provider is chosen because of better treatment quality, people will pay more for the service. The study also showed that the time needed to reach the service provider and the waiting time to be treated by the service provider have a significant positive relationship with OOP healthcare expenditure.

The desire for a healthy life motivates people to spend money on healthcare within or beyond their ability. People, in general, want to live healthy throughout their lifetime. Thus, the demand for seeking better healthcare service is inelastic in terms of income and price. These seemingly inevitable and high OOP payments are posing an economic burden for the patients and their families. An optimized payment policy can enhance the welfare of both the patients and the service providers.