Background: The private health service has influenced the escalation of out of pocket spending (OOPS), while there is an established free health service in Sri Lanka. Aim: This study evaluates the extent, impact and reasons for rising OOPS among patients admitted to two teaching hospitals in central Sri Lanka. Setting and Design: Prospective mixed method was used and quantitative and qualitative data regarding health expenses were gathered by an interviewer-administered questionnaire among 100 consecutive admissions with acute febrile illnesses. Results: Majority (78%) expressed concern about cost of care; low and high income groups have spent 33.6% and 10.7% respectively, of their monthly earning for the current acute febrile illness. low-income group with lack of savings have managed with loans and curtailing routine living expenses of the family. Conclusion: OOPS appears to be a considerable burden on the public. Deficiencies of doctor patient communication and lack of defined target population could be responsible for this situation.