Catastrophic medical expenditure risk

Details

Serval ID
serval:BIB_85E319BEAC4A
Type
Article: article from journal or magazin.
Collection
Publications
Institution
Title
Catastrophic medical expenditure risk
Journal
Journal of Health Economics
Author(s)
Flores  Gabriela, O'Donnell  Owen
ISSN
0167-6296 (Print)
Publication state
Published
Issued date
01/2016
Peer-reviewed
Oui
Volume
46
Pages
1-15
Abstract
We propose a measure of household exposure to particularly onerous medical expenses. The measure can be decomposed into the probability that medical expenditure exceeds a threshold, the loss due to predictably low consumption of other goods if it does and the further loss arising from the volatility of medical expenses above the threshold. Depending on the choice of threshold, the measure is consistent with a model of reference-dependent utility with loss aversion. Unlike the risk premium, the measure is only sensitive to particularly high expenses, and can identify households that expect to incur such expenses and would benefit from subsidised, but not actuarially fair, insurance. An empirical illustration using data from seven Asian countries demonstrates the importance of taking account of informal insurance and reveals clear differences in catastrophic medical expenditure risk across and within countries. In general, risk is higher among poorer, rural and chronically ill populations.
Keywords
Asia, Catastrophic payments, Medical expenditures, Reference-dependent utility, Risk
Create date
08/02/2016 18:16
Last modification date
21/08/2019 5:15
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