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Illness, medical expenditure and household consumption: observations from Taiwan

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      Illness conditions lead to medical expenditure. Even with various types of medical insurance, there can still be considerable out-of-pocket costs. Medical expenditure can affect other categories of household consumptions. The goal of this study is to provide an updated empirical description of the distributions of illness conditions and medical expenditure and their associations with other categories of household consumptions.


      A phone-call survey was conducted in June and July of 2012. The study was approved by ethics review committees at Xiamen University and FuJen Catholic University. Data was collected using a Computer-Assisted Telephone Survey System (CATSS). “Household” was the unit for data collection and analysis. Univariate and multivariate analyses were conducted, examining the distributions of illness conditions and the associations of illness and medical expenditure with other household consumptions.


      The presence of chronic disease and inpatient treatment was not significantly associated with household characteristics. The level of per capita medical expenditure was significantly associated with household size, income, and household head occupation. The presence of chronic disease was significantly associated with levels of education, insurance and durable goods consumption. After adjusting for confounders, the associations with education and durable goods consumption remained significant. The presence of inpatient treatment was not associated with consumption levels. In the univariate analysis, medical expenditure was significantly associated with all other consumption categories. After adjusting for confounding effects, the associations between medical expenditure and the actual amount of entertainment expenses and percentages of basic consumption, savings, and insurance (as of total consumption) remained significant.


      This study provided an updated description of the distributions of illness conditions and medical expenditure in Taiwan. The findings were mostly positive in that illness and medical expenditure were not observed to be significantly associated with other consumption categories. This observation differed from those made in some other Asian countries and could be explained by the higher economic status and universal basic health insurance coverage of Taiwan.

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      Most cited references 14

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      Catastrophic payments for health care in Asia.

      Out-of-pocket (OOP) payments are the principal means of financing health care throughout much of Asia. We estimate the magnitude and distribution of OOP payments for health care in fourteen countries and territories accounting for 81% of the Asian population. We focus on payments that are catastrophic, in the sense of severely disrupting household living standards, and approximate such payments by those absorbing a large fraction of household resources. Bangladesh, China, India, Nepal and Vietnam rely most heavily on OOP financing and have the highest incidence of catastrophic payments. Sri Lanka, Thailand and Malaysia stand out as low to middle income countries that have constrained both the OOP share of health financing and the catastrophic impact of direct payments. In most low/middle-income countries, the better-off are more likely to spend a large fraction of total household resources on health care. This may reflect the inability of the poorest of the poor to divert resources from other basic needs and possibly the protection of the poor from user charges offered in some countries. But in China, Kyrgyz and Vietnam, where there are no exemptions of the poor from charges, they are as, or even more, likely to incur catastrophic payments. (c) 2007 John Wiley & Sons, Ltd.
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        Coping with health-care costs: implications for the measurement of catastrophic expenditures and poverty.

        In the absence of formal health insurance, we argue that the strategies households adopt to finance health care have important implications for the measurement and interpretation of how health payments impact on consumption and poverty. Given data on source of finance, we propose to (a) approximate the relative impact of health payments on current consumption with a 'coping'-adjusted health expenditure ratio, (b) uncover poverty that is 'hidden' because total household expenditure is inflated by financial coping strategies and (c) identify poverty that is 'transient' because necessary consumption is temporarily sacrificed to pay for health care. Measures that ignore coping strategies not only overstate the risk to current consumption and exaggerate the scale of catastrophic payments but also overlook the long-run burden of health payments. Nationally representative data from India reveal that coping strategies finance as much as three-quarters of the cost of inpatient care. Payments for inpatient care exceed 10% of total household expenditure for around 30% of hospitalized households but less than 4% sacrifice more than 10% of current consumption to accommodate this spending.Ignoring health payments leads to underestimate poverty by 7-8% points among hospitalized households; 80% of this adjustment is hidden poverty due to coping.
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          Limitations of methods for measuring out-of-pocket and catastrophic private health expenditures.

          To investigate the effect of survey design, specifically the number of items and recall period, on estimates of household out-of-pocket and catastrophic expenditure on health. We used results from two surveys--the World Health Survey and the Living Standards Measurement Study--that asked the same respondents about health expenditures in different ways. Data from the World Health Survey were used to compare estimates of average annual out-of-pocket spending on health care derived from a single-item and from an eight-item measure. This was done by calculating the ratio of the average obtained with the single-item measure to that obtained with the eight-item measure. Estimates of catastrophic spending from the two measures were also compared. Data from the Living Standards Measurement Study from three countries (Bulgaria, Jamaica and Nepal) with different recall periods and varying numbers of items in different modules were used to compare estimates of average annual out-of-pocket spending derived using various methods. In most countries, a lower level of disaggregation (i.e. fewer items) gave a lower estimate for average health spending, and a shorter recall period yielded a larger estimate. However, when the effects of aggregation and recall period are combined, it is difficult to predict which of the two has the greater influence. The magnitude of both out-of-pocket and catastrophic spending on health is affected by the choice of recall period and the number of items. Thus, it is crucial to establish a method to generate valid, reliable and comparable information on private health spending.

            Author and article information

            [1 ]Department of Statistics, Xiamen University, Xiamen, China
            [2 ]Beijing Institute of Petrochemical Technology, Beijing, China
            [3 ]Department of Statistics and Information Science, FuJen Catholic University, New Taipei, Taiwan
            [4 ]School of Public Health, Yale University, 60 College ST, New Haven, CT 06520, USA
            BMC Public Health
            BMC Public Health
            BMC Public Health
            BioMed Central
            12 August 2013
            : 13
            : 743
            Copyright ©2013 Fang et al.; licensee BioMed Central Ltd.

            This is an Open Access article distributed under the terms of the Creative Commons Attribution License (, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

            Research Article

            Public health

            illness, medical expenditure, household consumption, taiwan


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