Remittance Impact on Healthcare in El Salvador
Luis Gonzalez | Tanner Bonner | Sol Rodriguez
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Introduction
For a country with an estimated 35% of households that are considered to be living in poverty [3] out-of-pocket healthcare costs pose a serious financial barrier to many. [4]
The World Health Organization states that El Salvador is ‘one of the few countries in Latin America considered in crisis with regard to human resources of health (HRH)’, with low health spending and resource maldistribution among its systems greatest challenges [3].
El Salvador’s domestic government health expenditure as a percentage of total health expenditure has remained relatively constant since 2015 [2]. During the past two decades, out-of-pocket expenditure has remained nearly a third of current health expenditure in El Salvador, although it has slightly decreased from roughly 33% to 29% from 2010-2018.
Many households in El Salvador are supported in their daily lives through remittances. Personal remittances as a % of the country’s GDP rose from 18% to 24% of the country’s GDP during 2010-2020 [2]. Remittances have rebounded after an early pandemic drop, recently reaching a record high of benefiting 360,000 households [1].
Of the remittance recipients in El Salvador, 79% are classified as poor or at risk of falling into poverty [3] with remittances providing households basic spending power. On average, remittances account for half of a household's total monthly income for remittance recipients [3]. It has estimated that one in twenty remittance recipient households spend remittances on healthcare costs [3].
How Much is Spent on Healthcare?
1225 households reported out of pocket health expenses in the past 6 months.
Collectively, these households spend approximately $570,000 anually on healthcare.
On average, a household will spend $466 each year, or around 15% of their total income to cover health expenses.
Tip: Hover over a bubble to see amount spent by individual households.
How do Remittances Help?
618 households (≈ 36% of respondents) receive remittances, or financial assistance from friends or family members who've migrated.
Yet collectively, they spend 127% more than those who don't receive remittances.
On average, households use 45% of their remittance towards health expenses.
Households that receive remittances spend $516 on average anually on healthcare.
Households that don't receive remittances spend $232 on average anually on healthcare.
Is health a concern?
317 households noted an interruption of medical services or shortage of medicine as a main concern in their daily lives.
23% of households that receive remittances list health as a concern.
Similarly, 21% that don't receive remittances list health as a concern.
Remittance help cover costs, but people are still concerned about healthcare.
Given that almost 1 in 4 households live under the poverty line in El Salvador, worrying about health adds an additional burden both emotionally and financially.
Who recieves aid?
Even though healthcare is a big expenditure for many, only 29 households receive any form of healthcare aid.
22 of them receive government health aid and 7 obtain help from churches, NGOs, private companies, or the United Nations.
Healthcare aid is scarce throughout the entire population. Why?
With high out of pocket health expenditures, this may point to lack of access or high barriers of entry to recieve this aid.
For example, El Salvador's government health service, MSPAS, is meant to reach 80% of the population. The World Health Organization (WHO) found that in practice, only 40% receive aid on a regular basis.
Key Takeaways
Out of pocket expenditure on healtcare places a financial burden.
Households that receive remittances are able to spend significantly more on healthcare.
Yet, concerns for health remain for remittance recipients.
Almost no households receive aid from the government or NGOs.
Remittances are an enormous impact for receiving families. We beleive increased assistance from governments or NGOs can alleviate household spending on healthcare and result in increased economic participation within El Salvador.
Suggestions for Government and NGOs
Government should increase their health spending to decrease out of pocket expenditure.
Make public health aid more attainable for informal workers, which comprise a majority of Salvadorans.
NGOs such as The World Bank and the WHO are encouraged to revisit and reexamine the current healthcare system.
The US Government should formally support migration working channels such as the Global Skill Partnership Model to provide economic mobility to those in El Salvador.