Indeed, 'being poor is expensive' is related to how they frame this fact. From the end of the same chapter:

The poor seem to be trapped by the same kinds of problems that afflict the rest of us—lack of information, weak beliefs, and procrastination among them. It is true that we who are not poor are somewhat better educated and informed, but the difference is small because, in the end, we actually know very little, and almost surely less than we imagine. Our real advantage comes from the many things that we take as given. We live in houses where clean water gets piped in—we do not need to remember to add Chlorin to the water supply every morning. The sewage goes away on its own—we do not actually know how. We can (mostly) trust our doctors to do the best they can and can trust the public health system to figure out what we should and should not do. We have no choice but to get our children immunized—public schools will not take them if they aren’t—and even if we somehow manage to fail to do it, our children will probably be safe because everyone else is immunized. Our health insurers reward us for joining the gym, because they are concerned that we will not do it otherwise. And perhaps most important, most of us do not have to worry where our next meal will come from. In other words, we rarely need to draw upon our limited endowment of self-control and decisiveness, while the poor are constantly being required to do so. We should recognize that no one is wise, patient, or knowledgeable enough to be fully responsible for making the right decisions for his or her own health. For the same reason that those who live in rich countries live a life surrounded by invisible nudges, the primary goal of health-care policy in poor countries should be to make it as easy as possible for the poor to obtain preventive care, while at the same time regulating the quality of treatment that people can get. An obvious place to start, given the high sensitivity to prices, is delivering preventive services for free or even rewarding households for getting them, and making getting them the natural default option when possible. Free Chlorin dispensers should be put next to water sources; parents should be rewarded for immunizing their children; children should be given free deworming medicines and nutritional supplements at school; and there should be public investment in water and sanitation infrastructure, at least in densely populated areas. As public health investments, many of these subsidies will more than pay for themselves in the value of reduced illness and death, and higher wages—children who are sick less often go to school more and earn more as adults. This does not mean that we can assume that these will automatically happen without intervention, however. Imperfect information about benefits and the strong emphasis people put on the immediate present limit how much effort and money people are willing to invest even in very inexpensive preventive strategies. And when they are not inexpensive, there is of course always the question of money. As far as treatment is concerned, the challenge is twofold: making sure that people can afford the medicines they need (Ibu Emptat, for one, clearly could not afford the asthma medicine that her son needed), but also restricting access to medicines they don’t need as a way to prevent growing drug resistance. Because regulating who sets up a practice and decides to call himself a doctor seems to be beyond the control of most governments in developing countries, the only way to reduce the spread of antibiotic resistance and the overuse of high-potency drugs may be to put maximal effort into controlling the sale of these drugs. All this sounds paternalistic, and in a way, it certainly is. But then it is easy, too easy, to sermonize about the dangers of paternalism and the need to take responsibility for our own lives, from the comfort of our couch in our safe and sanitary home. Aren’t we, those who live in the rich world, the constant beneficiaries of a paternalism now so thoroughly embedded into the system that we hardly notice it? It not only ensures that we take care of ourselves better than we would if we had to be on top of every decision, but also, by freeing us from having to think about these issues, it gives us the mental space we need to focus on the rest of our lives. This does not absolve us of the responsibility of educating people about public health. We do owe everyone, the poor included, as clear an explanation as possible of why immunization is important and why they have to complete their course of antibiotics. But we should recognize—indeed assume—that information alone will not do the trick. This is just how things are, for the poor, as for us.

I'm interested in your calling it 'paying in sanity.' Are you referring to the insanity of believing in Bengali babus, or the fact that they're preserving their own sanity in some way by not going to a real doctor for things they know they can't afford?

How is it rational to willfully keep others in ignorance of a risk they have every right to know about? The discomfort of honest disclosure is a minor inconvenience when compared to the disease.