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Catastrophic Medical Expenditure Risk

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  • Gabriela Flores

    (Institute of Health Economics and Management, University of Lausanne, and Institute of Health Policy and Management, Erasmus University Rotterdam)

  • Owen O'Donnell

    (Erasmus School of Economics, Erasmus University Rotterdam, and University of Macedonia, Greece)

Abstract

Medical expenditure risk can pose a major threat to living standards. We derive decomposable measures of catastrophic medical expenditure risk from reference-dependent utility with loss aversion. We propose a quantile regression based method of estimating risk exposure from cross-section data containing information on the means of financing health payments. We estimate medical expenditure risk in seven Asian countries and find it is highest in Laos and China, and is lowest in Malaysia. Exposure to risk is generally higher for households that have less recourse to self-insurance, lower incomes, wealth and education, and suffer from chronic illness.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 12-078/3.

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Date of creation: 24 Jul 2012
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Handle: RePEc:dgr:uvatin:20120078

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Web page: http://www.tinbergen.nl

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Keywords: medical expenditures; catastrophic payments; downside risk; reference-dependent utility; Asia;

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