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Which indicator should be used? A comparison between the incidence and intensity of catastrophic health expenditure: using difference-in-difference analysis

Author

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  • Jun Hyuk Koo

    (Yonsei University Wonju Industry-Academic Cooperation Foundation)

  • Hyun Woo Jung

    (Yonsei University)

Abstract

Background Catastrophic health expenditure (CHE) represents out-of-pocket payment as a share of household income. Most previous studies have focused on incidence aspects when assessing health policy effects. However, because CHE incidence is a binary variable, the effect of the health policy could not accurately be evaluated. On the contrary, the intensity of CHE is a continuous variable that can yield completely different results from previous studies. This study reassesses the coverage expansion plan for four serious diseases using the intensity of CHE in Korea. Methods We used the Korea Health Panel Study from 2013 to 2015 to conduct the analysis. The study population is households with chronic diseases patients. We divided the population into two groups: the policy beneficiary group, i.e., households with a patient of any of the four serious diseases, and the non-beneficiary group. A difference-in-difference model was employed to compare the variation in the intensity and incidence of CHE between the two groups. We defined the incidence of CHE as when the ratio of out-of-pocket medical expenses to household income is more than a threshold of 10%, and the intensity of CHE is the height of the ratio subtracting the threshold 10%. Results The increased rate of CHE intensity in households with four serious diseases was lower than that in households with other chronic diseases. The interaction term, which represents the effect of the policy, has a significant impact on the intensity but not on the incidence of CHE. Conclusions CHE indicators should be applied differently according to the purpose of policy evaluation. The incidence of CHE should be used as the final achievement indicator, and the intensity of CHE should be used as the process indicator. Furthermore, because CHE has an inherent characteristic that is measured by the ratio of household income to medical expenses, to lower this, a differential out-of-pocket maximum policy for each income class is more appropriate than a policy for strengthening the coverage for specific diseases.

Suggested Citation

  • Jun Hyuk Koo & Hyun Woo Jung, 2022. "Which indicator should be used? A comparison between the incidence and intensity of catastrophic health expenditure: using difference-in-difference analysis," Health Economics Review, Springer, vol. 12(1), pages 1-10, December.
    • Handle: RePEc:spr:hecrev:v:12:y:2022:i:1:d:10.1186_s13561-022-00403-w
    DOI: 10.1186/s13561-022-00403-w
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    References listed on IDEAS

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    1. Grigorakis, Nikolaos & Floros, Christos & Tsangari, Haritini & Tsoukatos, Evangelos, 2016. "Out of pocket payments and social health insurance for private hospital care: Evidence from Greece," Health Policy, Elsevier, vol. 120(8), pages 948-959.
    2. Adam Wagstaff & Eddy van Doorslaer, 2003. "Catastrophe and impoverishment in paying for health care: with applications to Vietnam 1993–1998," Health Economics, John Wiley & Sons, Ltd., vol. 12(11), pages 921-933, November.
    3. Lee, Hye Myung & Ko, Hansoo, 2022. "The impact of benefits coverage expansion of social health insurance: Evidence from Korea," Health Policy, Elsevier, vol. 126(9), pages 925-932.
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