Financial protection failure among urban poor populations in Karachi, Pakistan: a cross-sectional household survey of catastrophic health expenditure prevalence, determinants and insurance effectiveness.

Introduction: Pakistan has one of South Asia's highest burdens of out-of-pocket health expenditure. The disaggregated evidence for urban poor populations in major cities remains limited and hidden under the national data. Among the big cities in Pakistan, Karachi's informal settlements concentrate the country's most financially vulnerable households where formal health insurance coverage is negligible. This study measured catastrophic health expenditure prevalence among urban poor households in Karachi, determined its socioeconomic distribution and evaluated the financial protective effect of existing health insurance. Methods: A cross-sectional household survey was conducted across six administrative districts of Karachi between March and August 2023, covering informal settlements and low- and middle-income neighbourhoods. Multi-stage stratified cluster probability sampling yielded 1211 households (response rate 94.7%), with household heads or primary economic decision-makers as respondents. Catastrophic health expenditure was assessed at 10%, 25% and 40% WHO thresholds using standardised methodology. Concentration index analysis quantified socioeconomic distribution of the burden. Multivariate logistic regression identified determinants and assessed insurance effectiveness. Health expenditure-induced impoverishment and financial coping mechanisms were also examined. Results: Catastrophic health expenditure affected 91.7% (95% CI 90.1% to 93.1%) of households at the 10% threshold, 78.2% (95% CI 75.8% to 80.5%) at 25% and 66.1% (95% CI 63.4% to 68.8%) at 40%. Prevalence was uniformly high across income tertiles (lowest 95.0%, middle 93.8%, highest 86.4%), yielding a near-zero concentration index of -0.048 that contradicts the expected pro-poor gradient. Health expenditures impoverished 342 households (28.2%), pushing them below the national poverty line. Hospitalisation (adjusted OR 4.8, 95% CI 3.2 to 7.1) and chronic illness (adjusted OR 2.9, 95% CI 2.1 to 4.0) were the strongest determinants. Insurance coverage, present in only 68 households (5.6%), provided no significant financial protection (adjusted OR 0.82, 95% CI 0.43 to 1.57, p=0.553). Conclusions: Near-universal catastrophic burden distributed uniformly across income groups argues against means-tested targeting and supports universal financial protection approaches. Existing insurance provides no meaningful protection, pointing to systemic failure requiring fundamental health financing reform rather than incremental programme expansion.