The countries comprising the South Asian Association for Regional Cooperation (SAARC) region (India, Pakistan, Bangladesh, Nepal, Bhutan, Afghanistan, Sri Lanka, and the Maldives) commonly known as South Asia face serious healthcare affordability and accessibility challenges. According to World Bank national estimates, South Asian countries houses more than 390 million poor people and a very significant percentage of total population lies below national poverty line (Figure 1). This large number of population is quite unlikely to afford private healthcare services and heavily dependent on the public healthcare facilities.

New ADBI research (Aizawa and Helble, forthcoming) studies how overweight and obesity have become major threats to public health in Indonesia. The evidence shows that obesity, which was previously a problem among high-income groups in the country, has spread across all income groups. Obesity in the lower-income groups, in particular, has been rising rapidly. Overweight and obesity significantly increase the risk of suffering from a large number of chronic conditions. Lower income groups are particularly ill-prepared to face continuously high health expenditures, as health systems remain weak. Urgent policy action is needed to mitigate the risk of these groups of falling into poverty due to high health expenditures caused by diseases related to obesity.

Universal health coverage (UHC) has become a key agenda of policy makers in many countries. According to the definition of the World Health Organization (2010), UHC is the goal that “all people have access to health services and do not suffer financial hardship in paying for them.” In most developing countries, the goal of UHC is not easy to reach due to the fact that large, resource-poor populations have limited access to health services. Given that resource-poor people cannot afford out-of-pocket health expenditures, or can only afford them by sacrificing other priorities, a health financing system where people are required to pay for use directly is one of the major barriers to reaching UHC. Although cost sharing is necessary to prevent the overutilization of health services arising from the potential problem of moral hazard, universal coverage is more likely to be reached when the out-of-pocket ratio for direct payment is sufficiently low.