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Measuring Financial Protection: Catastrophic and Impoverishing Health Expenditure Explained
How financial protection in health is measured — out-of-pocket spending, catastrophic and impoverishing expenditure, and the revised SDG indicator 3.8.2 — with the calculation steps and common pitfalls.
PDFUpdated 30 September 2026Health financing & insurance
What's inside
- What counts as out-of-pocket health spending
- The three main approaches to catastrophic expenditure (budget share, capacity to pay, discretionary budget)
- The revised definition of SDG indicator 3.8.2 approved in March 2026
- How impoverishing health expenditure is measured
- Step-by-step calculation from household survey data
- Pitfalls, including people who cannot afford to seek care at all
Key points
- 01Financial protection is measured from household surveys that record both consumption and out-of-pocket health spending.
- 02Results depend on the definition and threshold, so always state them and compare like with like.
- 03The revised SDG 3.8.2 counts people whose out-of-pocket health spending exceeds 40% of their discretionary budget.
- 04Low catastrophic spending can hide unmet need, because people who forgo care spend nothing.
Frequently asked questions
What is catastrophic health expenditure?
Out-of-pocket spending on health that is large relative to a household's resources — for example more than a set share of its total consumption, or of what it has left after meeting basic needs.
What is the current definition of SDG indicator 3.8.2?
According to the UN SDG metadata updated in March 2026, it is the proportion of the population with positive out-of-pocket household expenditure on health exceeding 40% of household discretionary budget, where the discretionary budget is consumption or income minus the societal poverty line.
Can I use the calculator on this site for a national estimate?
No. The calculator shows how the measures work for one household. National estimates need nationally representative survey data, weights and careful treatment of the survey design.
Need this done properly?
This guide explains the method. If you would rather have the analysis done for you — with local data, independent quality control and a report you can defend — we can help.
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