Poverty and ill‑health are closely linked. Illness can both be a cause of poverty and a consequence of it, creating a vicious cycle that traps households in low‑income conditions.
How Illness Leads to Poverty
Loss of income: When a household member becomes ill, they may be unable to work, reducing the family’s earnings.
Medical expenses: Direct costs such as doctor’s fees, medicines, and hospital stays can exhaust savings.
Indirect costs: Transportation to health facilities, special diets, and the need for a caregiver to stay at home.
Long‑term effects: Chronic illnesses can cause permanent loss of productivity and limit future employment opportunities.
Direct and Indirect Economic Impacts
Impact Type
Explanation
Typical Magnitude (Example)
Direct medical costs
Payments for treatment, medication, and hospitalisation.
\$\text{Average out‑of‑pocket expense} = \frac{\text{Total health expenditure}}{\text{Number of patients}}\$
Potential earnings foregone by family members who provide care.
\$\text{Caregiver cost} = \text{Potential wage} \times \text{Hours of care}\$
Long‑term productivity loss
Reduced future earnings due to lasting health damage.
\$\text{Present value of lost future income} = \sum{t=1}^{T} \frac{\Delta Yt}{(1+r)^t}\$
Illustrative Example
Consider a rural household where the primary earner earns \$5 per day. The earner falls ill for 30 days and incurs \$50 in medical expenses.
Loss of earnings: \$5 × 30 = \$150
Medical expenses: $50
Total immediate cost: \$150 + \$50 = $200
If the household’s total savings are $150, the shortfall forces them to sell productive assets (e.g., livestock) or borrow at high interest, deepening poverty.
Why Illness is More Prevalent in Poor Communities
Poor housing and sanitation increase exposure to disease.
Limited access to clean water and nutritious food weakens immunity.
Inadequate health services mean delayed or no treatment.
Low levels of education reduce awareness of preventive measures.
Policy Measures to Break the Cycle
Universal health coverage: Provide free or subsidised basic health services.
Community health programmes: Mobile clinics, vaccination drives, and health education.
Social safety nets: Cash transfers or insurance schemes to offset income loss during illness.
Improving water and sanitation: Infrastructure projects that reduce disease incidence.
Nutrition programmes: School meals and food subsidies to strengthen immunity.
Summary
Illness can push households into poverty through loss of income, high medical costs, and long‑term productivity declines. The poorest are most vulnerable because of inadequate living conditions and limited access to health services. Effective interventions must combine health financing, preventive care, and broader development measures to break the poverty‑illness cycle.
Suggested diagram: Flowchart showing the cycle “Illness → Loss of Income & Medical Costs → Depletion of Savings → Asset Sale/ Debt → Poverty → Poor Living Conditions → Higher Risk of Illness”.