Out-of-pocket (OOP) expenditure is considered catastrophic if it is large relative to the
resources available to the household and this may push households into poverty. In this
paper, we investigated the impact of OOP health payments on households’ poverty in
Malawi by using data from the Third Integrated Household Survey (IHS3). Poverty
indices are computed before and after netting out OOP to investigate the effects of OOP
on poverty. Our findings show that if OOP health payments are accounted for, the level
of poverty in Malawi is higher than what official figures suggest. For instance, an
additional of 0.93% of households falls below the poverty line after paying for health
care.