Health shocks in China : are the poor and uninsured less protected ?

Health shocks have been shown to have important economic consequences in industrial countries. Less is known about how health shocks affect income, consumption, labor market outcomes, and medical expenditures in middle- and low-income countries. The authors explore these issues in China. In addition to providing new evidence on the general impact of health shocks, they also extend previous work by assessing the extent of risk protection afforded by formal health insurance, and by examining differences in the impact of health shocks between the rich and poor. The authors find that health shocks are associated with a substantial and significant reduction in income and labor supply. There are indications that the impact on income is less important for the insured, possibly because health insurance coverage is also associated with limited sickness insurance, but the effect is not significant. They also find evidence that negative health shocks are associated with an increase in unearned income for the poor but not the non-poor. This effect is however not strong enough to offset the impact on overall income. The loss in income is a consequence of a reduction in labor supply for the head of household, and the authors do not find evidence that other household members compensate by increasing their labor supply. Finally, negative health shocks are associated with a significant increase in out-of-pocket health care expenditures. More surprisingly, there is some evidence that the increase is greater for the insured than the uninsured. The findings suggest that households are exposed to considerable health-related shocks to disposable income, both through loss of income and health expenditures, and that health insurance offers very limited protection.Health Monitoring&Evaluation,Health Economics&Finance,Rural Poverty Reduction,Housing&Human Habitats,Health Law

Can insurance increase financial risk ? The curious case of health insurance in China

The most basic argument for insurance is that it reduces financial risk. But since insurance opens up new opportunities for consuming expensive high-technology care which permits health improvements that are valued by the insured, and because in many settings the provider is able and has an incentive to exploit the informational advantage he has over the patient, it is not immediately obvious that insurance will in practice reduce financial risk. The authors analyze the effect of insurance on the probability of an individual incurring"high"annual health expenses using data from three household surveys-one a cross-section survey, the other two panel surveys. All come from China, a country where providers have until recently largely been paid fee-for-service (often according to a schedule that encourages the overprovision of high-technology care and the underprovision of basic care) and who are only lightly regulated. The authors define annual spending as"high"if it exceeds 5 percent of average income in the sample and as"catastrophic"if it exceeds 10 percent of the household's own per capita income. The estimates of the effect of insurance on financial risk allow for the possible endogeneity of health insurance in the panel datasets by allowing for a time-invariant fixed effect capturing unobserved risk that may be correlated with insurance status, and in the cross-section dataset by using instrumental variables, where availability of and eligibility for health insurance are used as instruments. The results suggest that during the 1990s China's government and labor insurance schemes increased financial risk associated with household health care spending, but that the rural cooperative medical scheme significantly reduced financial risk in some areas but increased it in others (though not significantly). From the results, it appears that China's new health insurance schemes (private schemes, including coverage of schoolchildren) have also increased the risk of high levels of out-of-pocket spending on health. Where the authors find evidence of health insurance increasing the risk of"high"out-of-pocket expenses, the marginal effect is of the order of 15-20 percent; in the case of"catastrophic"expenses, it is even larger.Health Monitoring&Evaluation,Health Economics&Finance,Rural Poverty Reduction,Health Law,Insurance&Risk Mitigation

Are health shocks different ? evidence from a multi-shock survey in Laos

In Laos health shocks are more common than most other shocks and more concentrated among the poor. They tend to be more idiosyncratic than non-health shocks, and are more costly, partly because they lead to high medical expenses, but also because they lead to income losses that are sizeable compared with the income losses associated with non-health shocks. Health shocks also stand out from other shocks in the number of coping strategies they trigger: they are more likely than non-health shocks to trigger assistance from a nongovernmental organization and other households, dis-saving, borrowing, asset sales, an early harvest, the pawning of possessions, and the delaying of plans; by contrast, they are less likely to trigger assistance from government. Consumption regressions point to only limited evidence of households not being able to smooth consumption in the face of any shock. However, these results contrast with households'own assessments of the welfare impacts of shocks. The majority said they had to cut back consumption following a shock and that shocks considerably affected their welfare. Only health shocks are worse than a drought in terms of the likelihood of a family being forced to cut back consumption and in terms of the shock affecting a family's well-being"a lot."The poor are especially disadvantaged in terms of the greater damage that health shocks inflict on household well-being. Health shocks stand out too in leading to a loss of human capital: household members experiencing a health shock did not recover their former subjective health following the health shock, losing, on average, 0.6 points on a 5-point scale. The wealthier and better educated are better able to limit the health impacts of a health shock; the data are consistent with this being due to their greater proximity to a health facility.Health Monitoring&Evaluation,Health Systems Development&Reform,Housing&Human Habitats,Rural Poverty Reduction,Economic Theory&Research

Health facility surveys : an introduction

Health facility surveys come in various guises. One dimension in which they vary is their motivation. Some seek to understand better links between households and providers. Others seek to understand better provider behavior and performance. Still others seek to understand the interrelationships between providers, while yet others seek to shed light on the linkages between government and providers. Health facility surveys differ too in the data they collect, in part due to the different motivations. Surveys also vary in the way they collect data, some relying on direct observation, some on record review, and some on interview. Some quality data are collected through clinical vignettes. Facility data have been put to a variety of uses, including planning and budgeting; monitoring, evaluation, and promoting accountability; and research. Lindel and Wagstaff review some of the literature under each heading and offer some conclusions regarding the current state of health facility surveys.Health Monitoring&Evaluation,Public Health Promotion,Health Systems Development&Reform,Early Child and Children's Health,Housing&Human Habitats,Health Monitoring&Evaluation,Health Systems Development&Reform,Agricultural Knowledge and Information Systems,Housing&Human Habitats,Health Economics&Finance

Can insurance increase financial risk? The curious case of health insurance in China

The most basic argument for insurance is that it reduces financial risk. But since insurance opens up new opportunities for consuming expensive high-technology care which permits health improvements that are valued by the insured, and because in many settings the provider is able and has an incentive to exploit the informational advantage he has over the patient, it is not immediately obvious that insurance will in practice reduce financial risk. The authors analyze the effect of insurance on the probability of an individual incurring high annual health expenses using data from three household surveys-one a cross-section survey, the other two panel surveys. All come from China, a country where providers have until recently largely been paid fee-for-service (often according to a schedule that encourages the overprovision of high-technology care and the underprovision of basic care) and who are only lightly regulated. The authors define annual spending as high if it exceeds 5 percent of average income in the sample and as catastrophic if it exceeds 10 percent of the household\u27s own per capita income. The estimates of the effect of insurance on financial risk allow for the possible endogeneity of health insurance in the panel datasets by allowing for a time-invariant fixed effect capturing unobserved risk that may be correlated with insurance status, and in the cross-section dataset by using instrumental variables, where availability of and eligibility for health insurance are used as instruments. The results suggest that during the 1990s China\u27s government and labor insurance schemes increased financial risk associated with household health care spending, but that the rural cooperative medical scheme significantly reduced financial risk in some areas but increased it in others (though not significantly). From the results, it appears that China\u27s new health insurance schemes (private schemes, including coverage of schoolchildren) have also increased the risk of high levels of out-of-pocket spending on health. Where the authors find evidence of health insurance increasing the risk of high out-of-pocket expenses, the marginal effect is of the order of 15-20 percent; in the case of catastrophic expenses, it is even larger

Health-seeking behavior and hospital choice in China's New Cooperative Medical System

Since the dissolution of the Rural Cooperative Medical System at the end of the commune period, illness has emerged as a leading cause of poverty in rural China. To address the poor state of health care, the Chinese government unveiled the New Cooperative Medical System in 2002. Because local governments have been given significant control over program design, fundamental characteristics of the program vary from one county to the next. These differences may influence the decision to seek health care as well as the choice of hospital conditional on that initial decision. In this paper, we use a nested logit model to analyze household survey data from 25 counties to analyze the determinants of such health-seeking behavior. We find that age, the share of household expenditures allocated to food consumption (a measure of relative income), and the presence of other sick people in the household negatively affect the decision to seek health care while disability has a positive influence. Further, conditional on seeking treatment, the reimbursement scheme in place in each county and the average daily expenditure associated with hospitalization strongly influence hospital choice. Copyright © 2009 John Wiley & Sons, Ltd.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/63062/1/1508_ftp.pd

The evolution of socioeconomic status-related inequalities in maternal health care utilization: evidence from Zimbabwe, 1994-2011

Background: Inequalities in maternal health care are pervasive in the developing world, a fact that has led to questions about the extent of these disparities across socioeconomic groups. Despite a growing literature on maternal health across Sub-Saharan African countries, relatively little is known about the evolution of these inequalities over time for specific countries. This study sought to quantify and explain the observed differences in prenatal care use and professional delivery assistance in Zimbabwe. Methods: The empirical analysis uses four rounds of the nationwide Zimbabwe Demographic and Health Survey administered in 1994, 1999, 2005/06 and 2010/11. Two binary indicators were used as measures of maternal health care utilization; (1) the receipt of four or more antenatal care visits and (2) receiving professional delivery assistance for the most recent pregnancy. We measure inequalities in maternal health care use using the Erreygers corrected concentration index. A decomposition analysis was conducted to determine the underlying drivers of the measured disparities. Results: The computed concentration indices for professional delivery assistance and prenatal care reveal a mostly pro-rich distribution of inequalities between 1994 and 2011. Particularly, the concentration index [95% confidence interval] for the receipt of prenatal care was 0.111 [0.056, 0.171] in 2005/06 and 0.094 [0.057, 0.138] in 2010/11. For professional delivery assistance, the concentration index stood at 0.286 [0.244, 0.329] in 2005/06 and 0.324 [0.283, 0.366] in 2010/11. The pro-rich inequality was also increasing in both rural and urban areas over time. The decomposition exercise revealed that wealth, education, religion and information access were the underlying drivers of the observed inequalities in maternal health care. Conclusions: In Zimbabwe, socioeconomic disparities in maternal health care use are mostly pro-rich and have widened over time regardless of the location of residence. Overall, we established that inequalities in wealth and education are amongst the top drivers of the observed disparities in maternal health care. These findings suggest that addressing inequalities in maternal health care utilization requires coordinated public policies targeting the more poor and vulnerable segments of the population in Zimbabwe

Changes in socioeconomic inequality in Indonesian children's cognitive function from 2000 to 2007: a decomposition analysis

Background: Measuring social inequalities in health is common; however, research examining inequalities in child cognitive function is more limited. We investigated household expenditure-related inequality in children’s cognitive function in Indonesia in 2000 and 2007, the contributors to inequality in both time periods, and changes in the contributors to cognitive function inequalities between the periods. Methods: Data from the 2000 and 2007 round of the Indonesian Family Life Survey (IFLS) were used. Study participants were children aged 7–14 years (n = 6179 and n = 6680 in 2000 and 2007, respectively). The relative concentration index (RCI) was used to measure the magnitude of inequality. Contribution of various contributors to inequality was estimated by decomposing the concentration index in 2000 and 2007. Oaxaca-type decomposition was used to estimate changes in contributors to inequality between 2000 and 2007. Results: Expenditure inequality decreased by 45% from an RCI = 0.29 (95% CI 0.22 to 0.36) in 2000 to 0.16 (95% CI 0.13 to 0.20) in 2007 but the burden of poorer cognitive function was higher among the disadvantaged in both years. The largest contributors to inequality in child cognitive function were inequalities in per capita expenditure, use of improved sanitation and maternal high school attendance. Changes in maternal high school participation (27%), use of improved sanitation (25%) and per capita expenditures (18%) were largely responsible for the decreasing inequality in children’s cognitive function between 2000 and 2007. Conclusions: Government policy to increase basic education coverage for women along with economic growth may have influenced gains in children’s cognitive function and reductions in inequalities in Indonesia.Amelia Maika, Murthy N. Mittinty, Sally Brinkman, Sam Harper, Elan Satriawan, John W. Lync

The Effects of the Massachusetts Health Reform on Financial Distress

A major benefit of health insurance coverage is that it protects the insured from unexpected medical costs that may devastate their personal finances. In this paper, we use detailed credit report information on a large panel of individuals to examine the effect of a major health care reform in Massachusetts in 2006 on a broad set of financial outcomes. The Massachusetts model served as the basis for the Affordable Care Act and allows us to examine the effect of coverage on financial outcomes for the entire population of the uninsured, not just those with very low incomes. We exploit plausibly exogenous variation in the impact of the reform across counties and age groups using levels of pre-reform insurance coverage as a measure of the potential effect of the reform. We find that the reform reduced the total amount of debt that was past due, the fraction of all debt that was past due, improved credit scores and reduced personal bankruptcies. We also find suggestive evidence that the reform lowered the total amount of debt and decreased third party collections. The effects are most pronounced for individuals who had limited access to credit markets before the reform. These results show that health care reform has implications that extend well beyond the health and health care utilization of those who gain insurance coverage