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Catastrophic health spending in Europe: equity and policy implications of different calculation methods

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  • Cylus, Jonathan
  • Thomson, Sarah
  • Evetovits, Tamás
Abstract
Objective To investigate the equity and policy implications of different methods of calculating catastrophic health spending. Methods We used routinely collected data from recent household budget surveys in 14 European countries. We calculated the incidence of catastrophic health spending and its distribution across consumption quintiles using four methods. We compared the budget share method, which is used to monitor universal health coverage (UHC) in the sustainable development goals (SDGs), with three other well established methods: actual food spending; partial normative food spending; and normative spending on food, housing and utilities. Findings Country estimates of the incidence of catastrophic health spending were generally similar using the normative spending on food, housing and utilities method and the budget share method at the 10% threshold of a household’s ability to pay. The former method found that catastrophic spending was concentrated in the poorest quintile in all countries, whereas with the budget share method catastrophic spending was largely experienced by richer households. This is because the threshold for catastrophic health spending in the budget share method is the same for all households, while the other methods generated effective thresholds that varied across households. The normative spending on food, housing and utilities method was the only one that produced an effective threshold that rose smoothly with total household expenditure. Conclusion The budget share method used in the SDGs overestimates financial hardship among rich households and underestimates hardship among poor households. This raises concerns about the ability of the SDG process to generate appropriate guidance for policy on UHC.

Suggested Citation

  • Cylus, Jonathan & Thomson, Sarah & Evetovits, Tamás, 2018. "Catastrophic health spending in Europe: equity and policy implications of different calculation methods," LSE Research Online Documents on Economics 89062, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:89062
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    References listed on IDEAS

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    1. Eddy van Doorslaer & Owen O'Donnell & Ravindra P. Rannan-Eliya & Aparnaa Somanathan & Shiva Raj Adhikari & Charu C. Garg & Deni Harbianto & Alejandro N. Herrin & Mohammed Nazmul Huq & Shamsia Ibragimo, 2007. "Catastrophic payments for health care in Asia," Health Economics, John Wiley & Sons, Ltd., vol. 16(11), pages 1159-1184.
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    Cited by:

    1. Aleksandra Kolasa & Ewa Weychert, 2024. "The causal effect of catastrophic health expenditure on poverty in Poland," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 25(2), pages 193-206, March.
    2. Kyriopoulos, Ilias & Nikoloski, Zlatko & Mossialos, Elias, 2021. "Financial protection in health among the middle-aged and elderly: Evidence from the Greek economic recession," Health Policy, Elsevier, vol. 125(9), pages 1256-1266.
    3. Ta, Yuqi & Zhu, Yishan & Fu, Hongqiao, 2020. "Trends in access to health services, financial protection and satisfaction between 2010 and 2016: Has China achieved the goals of its health system reform?," Social Science & Medicine, Elsevier, vol. 245(C).
    4. Eunkyoung Kim & Soonman Kwon, 2021. "The effect of catastrophic health expenditure on exit from poverty among the poor in South Korea," International Journal of Health Planning and Management, Wiley Blackwell, vol. 36(2), pages 482-497, March.
    5. Hajizadeh, Mohammad & Pandey, Sujita & Pulok, Mohammad Habibullah, 2023. "Decomposition of socioeconomic inequalities in catastrophic out-of-pocket expenditure for healthcare in Canada," Health Policy, Elsevier, vol. 127(C), pages 51-59.
    6. O'Donnell, Owen, 2024. "Health and health system effects on poverty: A narrative review of global evidence," Health Policy, Elsevier, vol. 142(C).
    7. Kim, Sujin & Kwon, Soonman, 2023. "Has South Korea achieved the goals of national health insurance? Trends in financial protection of households between 2011 and 2018," Social Science & Medicine, Elsevier, vol. 326(C).
    8. Ahmed Abdelmajed Alkhodary & Syed Mohamed Aljunid & Aniza Ismail & Amrizal Muhammad Nur & Suzana Shahar, 2022. "Health Care Utilization and Out-of-Pocket Payments among Elderly with Cognitive Frailty in Malaysia," IJERPH, MDPI, vol. 19(6), pages 1-18, March.
    9. Johnston, Bridget M. & Burke, Sara & Barry, Sarah & Normand, Charles & Ní Fhallúin, Maebh & Thomas, Steve, 2019. "Private health expenditure in Ireland: Assessing the affordability of private financing of health care," Health Policy, Elsevier, vol. 123(10), pages 963-969.
    10. Hsu, Justine & Majdzadeh, Reza & Mills, Anne & Hanson, Kara, 2021. "A dominance approach to analyze the incidence of catastrophic health expenditures in Iran," Social Science & Medicine, Elsevier, vol. 285(C).
    11. Nguyen Thi Thu Thuong & Yme Van Den Berg & Tran Quang Huy & Do Anh Tai & Bui Nu Hoang Anh, 2021. "Determinants of catastrophic health expenditure in Vietnam," International Journal of Health Planning and Management, Wiley Blackwell, vol. 36(2), pages 316-333, March.
    12. Yu Fu & Mingsheng Chen, 2022. "The Impact of Multimorbidities on Catastrophic Health Expenditures among Patients Suffering from Hypertension in China: An Analysis of Nationwide Representative Data," Sustainability, MDPI, vol. 14(13), pages 1-15, June.
    13. Tomson Ogwang & Germano Mwabu, 2024. "Adaptation of the Foster‐Greer‐Thorbecke poverty measures for the measurement of catastrophic health expenditures," Health Economics, John Wiley & Sons, Ltd., vol. 33(10), pages 2419-2436, October.
    14. Maria-Carmen García-Centeno & Román Mínguez-Salido & Raúl del Pozo-Rubio, 2021. "The Classification of Profiles of Financial Catastrophe Caused by Out-of-Pocket Payments: A Methodological Approach," Mathematics, MDPI, vol. 9(11), pages 1-20, May.
    15. Sha Chen & Zhiye Lin & Xiaoru Fan & Jushuang Li & Yao-Jie Xie & Chun Hao, 2022. "The Comparison of Various Types of Health Insurance in the Healthcare Utilization, Costs and Catastrophic Health Expenditures among Middle-Aged and Older Chinese Adults," IJERPH, MDPI, vol. 19(10), pages 1-14, May.
    16. Garcia-Mandicó, Sílvia & Reichert, Arndt & Strupat, Christoph, 2021. "The Social Value of Health Insurance: Results from Ghana," Journal of Public Economics, Elsevier, vol. 194(C).
    17. Muaz Sayuti & Surianti Sukeri, 2022. "Assessing progress towards Sustainable Development Goal 3.8.2 and determinants of catastrophic health expenditures in Malaysia," PLOS ONE, Public Library of Science, vol. 17(2), pages 1-12, February.
    18. Mohammadreza Amiresmaili & Zahra Emrani, 2019. "Investigating the exposure of Iranian households to catastrophic health expenditure due to the need to purchase medicines," PLOS ONE, Public Library of Science, vol. 14(4), pages 1-11, April.
    19. Owen (O.A.) O'Donnell, 2019. "Financial Protection Against Medical Expense," Tinbergen Institute Discussion Papers 19-010/V, Tinbergen Institute.
    20. Thuong, Nguyen Thi Thu, 2021. "Catastrophic health expenditure and impoverishment in Vietnam: Evidence from national Household Living Standards Surveys 2008–2018," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 668-684.
    21. HyunWoo Jung & Kwang-Soo Lee, 2022. "What Policy Approaches Were Effective in Reducing Catastrophic Health Expenditure? A Systematic Review of Studies from Multiple Countries," Applied Health Economics and Health Policy, Springer, vol. 20(4), pages 525-541, July.

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