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Catastrophic Medical Expenditure Risk

Author

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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.

Suggested Citation

  • Gabriela Flores & Owen O'Donnell, 2012. "Catastrophic Medical Expenditure Risk," Tinbergen Institute Discussion Papers 12-078/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20120078
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    Cited by:

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    2. Zelalem Yilma & Owen O’Donnell & Anagaw Mebratie & Getnet Alemu & Arjun S. Bedi, 2018. "Subjective Expectations of Medical Expenditures and Insurance in Rural Ethiopia," Contributions to Economic Analysis, in: Health Econometrics, volume 127, pages 23-55, Emerald Group Publishing Limited.
    3. Ramses H. Abul Naga & Karine Lamiraud, 2008. "Catastrophic Health ExpenditureandHousehold Well-Being," STICERD - Distributional Analysis Research Programme Papers 098, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    4. Gustav Kjellsson & Dennis Petrie & Tom (T.G.M.) van Ourti, 2018. "Measuring income-related inequalities in risky health prospects," Tinbergen Institute Discussion Papers 18-007/V, Tinbergen Institute.
    5. Owen (O.A.) O'Donnell, 2019. "Financial Protection Against Medical Expense," Tinbergen Institute Discussion Papers 19-010/V, Tinbergen Institute.
    6. Abdulrahman Jbaily & Annie Haakenstad & Mizan Kiros & Carlos Riumallo-Herl & Stéphane Verguet, 2022. "Examining the density in out-of-pocket spending share in the estimation of catastrophic health expenditures," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(5), pages 903-912, July.
    7. Nikolaos Grigorakis & Christos Floros & Haritini Tsangari & Evangelos Tsoukatos, 2017. "Combined social and private health insurance versus catastrophic out of pocket payments for private hospital care in Greece," International Journal of Health Economics and Management, Springer, vol. 17(3), pages 261-287, September.

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    More about this item

    Keywords

    medical expenditures; catastrophic payments; downside risk; reference-dependent utility; Asia;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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