Refining estimates of catastrophic healthcare expenditure: an application in the Indian context
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Refining estimates of catastrophic healthcare expenditure: an application in the Indian context Indrani Gupta · William Joe
Received: 6 January 2011 / Accepted: 10 February 2013 / Published online: 24 February 2013 © Springer Science+Business Media New York 2013
Abstract Empirics of catastrophic healthcare expenditure, especially in the Indian context, are often based on consumption expenditure data that inadequately informs about the ability to pay. Use of such data can generate a pro-rich bias in the estimation of catastrophic expenditure thereby suggesting greater concentration of such expenditures among richer households. To improve upon the existing approach, this paper suggests a multidimensional approach to comprehend the incidence of catastrophic expenditure. Here, we integrate the information on health expenditure with other social and economic parameters of deprivation. An empirical illustration is provided by using nationally representative survey on morbidity and healthcare in India. The results of the multidimensional approach are consistent with the theoretical underpinnings of the ability-to-pay approach and emphasizes on the severity of the problem in rural areas. The suggested methodology is flexible and allows for context-specific prioritization in selection of parameters of vulnerability while estimating the incidence of catastrophic expenditures. Keywords Catastrophic expenditure · Out-of-pocket health expenditure · Targeting · Health policy · India JEL Classification
I1
I. Gupta Health Policy Research Unit, Institute of Economic Growth, University of Delhi Enclave, Delhi 110007, India e-mail: [email protected]; [email protected] W. Joe (B) Population Research Centre, Institute of Economic Growth, University of Delhi Enclave, Delhi 110007, India e-mail: [email protected]; [email protected]
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I. Gupta, W. Joe
Introduction Out-of-pocket healthcare payments that are high enough to endanger a household’s customary living standards are referred to as ‘catastrophic’ healthcare expenditure (Berki 1986). The notion of ‘high enough’ expenditure is arguably relative in nature, as it is plausible that even small health expenditures can be financially disastrous for low income households. In fact, such payment prevents poor households from meeting their basic necessities and compels them to adopt desperate coping strategies such as sale of (productive) assets. Moreover, the resulting indebtedness due to high treatment expenditure pushes several of the households into chronic poverty. The welfare-reducing impact of catastrophic expenditures is increasingly being identified by the development community as an area requiring urgent policy action. For instance, the World Health Assembly (2005) has called for interventions to protect individuals seeking care against catastrophic health-care expenditure and possible impoverishment. A large number of studies have attempted to quantify the incidence of catastrophic expenditure using alternative theoretical and empirical definitions. Most of
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