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Financial Catastrophism Inherent with Out-of-Pocket Payments in Long Term Care for Households: A Latent Impoverishment

Author

Listed:
  • Raúl Del Pozo-Rubio

    (School of Social Sciences, Sociosanitary Research Center, Castilla-La Mancha University (UCLM), 16071 Cuenca, Spain)

  • Isabel Pardo-García

    (School of Economics and Business Administration, Sociosanitary Research Center, Castilla-La Mancha University (UCLM), 02071 Albacete, Spain)

  • Francisco Escribano-Sotos

    (School of Economics and Business Administration, Sociosanitary Research Center, Castilla-La Mancha University (UCLM), 02071 Albacete, Spain)

Abstract

Background: Out-of-pocket (OOP) payments are configured as an important source of financing long-term care (LTC). However, very few studies have analyzed the risk of impoverishment and catastrophic effects of OOP in LTC. To estimate the contribution of users to the financing of LTC and to analyze the economic consequences for households in terms of impoverishment and catastrophism after financial crisis in Spain. Methods: The database that was used is the 2008 Spanish Disability and Dependency Survey, projected to 2012. We analyze the OOP payments effect associated to the impoverishment of households comparing volume and financial situation before and after OOP payment. At the same time, the extent to which OOP payment had led to catastrophism was analyzed using different thresholds. Results: The results show that contribution of dependent people to the financing of the services they receive exceeds by 50% the costs of these services. This expenditure entails an increase in the number of households that live below the poverty. In terms of catastrophism, more than 80% of households dedicate more than 10% of their income to dependency OOP payments. In annual terms, the catastrophe gap generated by devoting more than 10% of the household income to dependent care OOP payment reached €3955, 1 million (0.38% of GDP). Conclusion: This article informs about consequences of OOP in LCT and supplements previous research that focus on health. Our results should serve to develop strategic for protection against the financial risk resulting from facing the costs of a situation of dependence.

Suggested Citation

  • Raúl Del Pozo-Rubio & Isabel Pardo-García & Francisco Escribano-Sotos, 2020. "Financial Catastrophism Inherent with Out-of-Pocket Payments in Long Term Care for Households: A Latent Impoverishment," IJERPH, MDPI, vol. 17(1), pages 1-19, January.
    • Handle: RePEc:gam:jijerp:v:17:y:2020:i:1:p:295-:d:303983
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    2. Jingjing Zhou & Yaoyu Zhang & Yong Sha & Jianfang Zhou & Hang Ren & Xin Shen & Hui Xu, 2022. "The Effect of the “Triple-Layer Medical Security” Policy on the Vulnerability as Expected Poverty of Rural Households: Evidence from Yunnan Province, China," IJERPH, MDPI, vol. 19(19), pages 1-22, October.
    3. 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.

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