What is Catastrophic Healthcare Spending?

By Jorge A Cevallos, MD

25/01/2022

What is catastrophic healthcare expenditure? It represents an out-of-pocket payment for health care that exceed a specified threshold of a household´s income or its capacity to pay (1). The World Health Organization categorizes the threshold as calendar-year out-of-pocket plus premium spending exceeding 40% of post subsistence income (typical food and housing spending from the Bureau of Labor Statistics) (1).

This is a phenomenon that affects the insured and uninsured alike. Data from adults aged 20 to 64 years in the Medical Expenditure Panel Survey, collected from 2010 to 2017 revealed that 11 million US adults (6 million with private insurance) experience catastrophic health expenditures annually (2).

Many countries deal with catastrophic healthcare expenditure. Examples of diseases that deal with catastrophic illness are cancer, stroke, debilitating heart disease, some congenital malformations, and conditions that require long-term treatment (3). Examples of catastrophic illness are cancers, strokes and debilitating heart diseases, some congenital malformations, and in general chronic conditions that require long-term treatment.

References

1. Liu H, Zhu H, Wang J, Qi X, Zhao M, Shan L, et al. Catastrophic health expenditure incidence and its equity in China: A study on the initial implementation of the medical insurance integration system. BMC Public Health [Internet]. 2019 Dec 30 [cited 2022 Jan 24];19(1):1–12. Available from: https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-019-8121-2

2. Liu C, Chhabra KR, Scott JW. Catastrophic Health Expenditures Across Insurance Types and Incomes Before and After the Patient Protection and Affordable Care Act. JAMA Network Open [Internet]. 2020 Sep 1 [cited 2022 Jan 24];3(9):e2017696–e2017696. Available from: https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2770949

3. Lozano R, Garrido F. IMPROVING HEALTH SYSTEM EFFICIENCY Health Systems Governance & Financing MEXICO Catastrophic Health Expenditure Fund.