The impact of adverse health events on consumption: Understanding the mediating effect of income transfers, wealth, and health insurance

Health and health system effects on poverty: A narrative review of global evidence

Ill-health causes poverty. The effect runs through multiple mechanisms that span lifetimes and cross generations. Health systems can reduce poverty by improving health and weakening links from ill-health to poverty. This paper maps routes through which ill-health can cause poverty and identifies those that are potentially amenable to health policy. The review confirms that ill-health is an important contributor to poverty and it finds that the effect through health-related loss of earnings is often larger than that through medical expenses. Both effects are smaller in countries that are closer to universal health coverage and have higher social safety nets. The paper also reviews evidence from low- and middle-income countries (LMICs) and the United States (US) on the poverty-reduction effectiveness of public health insurance (PubHI) for low-income households. This reveals that PubHI does not always deliver financial protection to its targeted population in LMICs. Countries that have succeeded in achieving this goal often combine extension of coverage with supply-side interventions to build capacity and avoid perverse provider incentives in response to insurance. In the US, PubHI is effective in reducing poverty by shielding low-income households with children from healthcare costs and, consequently, generating long-run improvements in health that increase lifetime earnings. Poverty reduction is a potentially important co-benefit of health systems.

Managing the onset of a new disease in older age: Housing wealth, mortgage borrowing, and medication adherence

The relationship between wealth and health is an important yet complex topic for health research. While prior studies document the importance of wealth for healthy aging, the understanding of the mechanisms through which wealth supports health consumption is limited. We investigate the wealth-to-health link by explicitly modeling the effect of liquidating home equity through borrowing on health expenditures, measured here as cost-related non-adherence to prescription medications (CRN), following the onset of one of six costly diseases on or after age 65. Using individual-level data from the 2002-2018 waves of the U.S. Health and Retirement Study (3,772 respondents; 13,708 observations), we exploit exogenous spatial and intertemporal variation in ZIP-code level house values to instrument for borrowing. Results indicate each additional $10,000 in new mortgage borrowing is associated with a 1.6 percentage point reduction in CRN. In subsample regressions, this relationship is strongest for older adults for whom home equity is their largest source of wealth. In a falsification test, we find no relationship between house value changes and CRN for older renters, and no effect of mortgage borrowing on prescription drug non-adherence for health or memory reasons. Our results contribute to the literature by documenting how housing wealth can be tapped by older adults through borrowing to smooth health-related consumption following disease diagnosis. However, not all older homeowners are willing or able to borrow from home equity. Our findings suggest that it is not simply the stock of housing wealth that leads to better health outcomes, but instead the liquidation of housing wealth. Housing wealth is thus not a uniform social determinate of health for older homeowners as it is moderated by the ability to borrow.

Effect of Health Shocks on Poverty Status in South Korea: Exploring the Mechanism of Medical Impoverishment

BACKGROUND

South Korea has the highest out-of-pocket burden for medical expenses among the Organisation for Economic Co-operation and Development (OECD) member countries and has no formal sickness benefit system, along with United States and Switzerland, greatly increasing the risk of poverty due to a sudden illness.

METHODS

We identify the causal effect of health shocks on poverty status and explore the mechanisms of medical impoverishment by analyzing longitudinal data from 13 670 households that participated in the representative Korean Welfare Panel Study (KOWEPS) from 2007 to 2016. In this study, we define a health shock as a case in which no household members were hospitalized in the previous year, but together they had more than 30 days of hospitalization in this year. The propensity score matching method was combined with a mediation analysis in this work.

RESULTS

The proportion of households in absolute poverty increased by 4.6-8.0 percentage points among households that experienced a health shock compared with matched controls. The selection effects due to health shock were estimated to be 5.6-8.2 percentage points. On average, a sudden hospitalization reduces annual non-medical expenditures and equivalized disposable income by just over 3.2 million KRW (2500 USD) and 1.2 million KRW (1000 USD), respectively. Health shock induces impoverishment after one year through both the medical expense and work capacity pathways, which explain 12.8% and 12.8% of the total effect, respectively. However, when we decompose the mediation effect of a health shock on poverty status after two years, we find that a health shock leads to poverty mainly through labor force nonparticipation (9.9%).

CONCLUSION

Income stabilizing scheme to protect households that experience a health shock should be introduced as a policy alternative to confront the issue of medical impoverishment.

The value of vaccines

Optimizing vaccine spending depends on recognizing the full value of vaccination (VoV). Existing taxonomies of such value are not comprehensive because they are not guided by general theories. I rely on two such theories: subjective-value theory claims that what has value is determined by what people actually or ideally want in life. A welfarist theory of government states that a fundamental objective of government is to promote social value (or social welfare). These jointly imply that any aspect of life that individuals actually or ideally value and that could be negatively affected by vaccine-preventable diseases (and therefore positively affected by preventive vaccines) is an element of VoV. I build a more comprehensive-value taxonomy than currently exists based on this implication.

Quality of public health insurance and individuals' consumption structure upgrades: evidence from China

BACKGROUND

The aim of this study was to investigate the relationship between the quality of public health insurance and individuals' consumption structure upgrades in China.

METHODS

This study was conducted using data from a population of 6430 Chinese individuals aged 18 to 70 y from the 2017 Chinese Social Survey. We used multiple linear regression models and the two-stage least-squares model to explore the impact and heterogeneity of the quality of public health insurance on individuals' consumption structure upgrades. Furthermore, we performed structural equation modelling to clarify the mediation effects of the impact.

RESULTS

The quality of public health insurance was significantly correlated with individuals' consumption structure upgrades (β = 0.368, SD = 0.084), and the impact of the quality of public health insurance on individuals' hedonic consumption in urban regions was significantly higher than that in rural regions (β = 0.499, SD = 0.218). Furthermore, the quality of public health insurance could promote upgrades to individuals' consumption structure by reducing the burden of medical expenses and stabilizing or increasing individuals' expectations regarding the future economic level.

CONCLUSION

The results indicated that developing countries should implement additional measures to enhance the quality of public health insurance, which would not only help protect the health of individuals but also stimulate individuals' consumption to achieve rapid economic growth.

The household economic costs associated with depression symptoms: A cross-sectional household study conducted in the North West province of South Africa

AIM

The aim of this study was to assess the association between depression symptom severity and household income, consumption, asset-based wealth, debt and use of distress financing strategies, to understand how depression symptom severity and household economic welfare are related.

METHODS

A household survey was administered to the households of primary health clinic-attenders who were screened for depression symptoms using the 9-item Patient Health Questionnaire in the chronic care units of four primary health clinics in the North West province of South Africa. Univariate and multivariable regression models were used to assess whether a range of household economic measures were significant predictors of depression symptom severity; and whether depression symptom severity significantly predicted changes to household economic welfare, across a number of different economic measures using both multiple linear regression and logistic regression analyses.

RESULTS

On univariate analysis, certain characteristics were associated with significantly worse (higher) PHQ-9 scores, namely: households in which the household head was younger, female, and unmarried; households in which the indexed patient was younger, and did not receive an education beyond primary school; increasing household size, receipt of a social grant, households living in housing constructed of metal sheet walls and households making use of a public tap as their primary water source. In addition, univariate analysis demonstrated that higher log-transformed food expenditure, lower log-transformed capacity to pay, the presence of household debt and both reducing the size or frequency of meals and drawing up retail shop accounts in response to financial distress over the past three years were associated with significantly worse (higher) PHQ-9 scores. Multivariable analysis demonstrated that larger household sizes (p<0.05), receipt of social grants (p<0.05), higher food expenditure (p<0.01), and drawing up retail shop accounts in response to financial distress (p<0.05) were independently predictive of worse (higher) PHQ-9 scores. Inversely, increasing age of the household head (p<0.05), having piped water directly into the household (as opposed to making use of a public water sources) (p<0.01), and increasing capacity to pay (p<0.01) were independently predictive of better (lower) PHQ-9 scores. Similarly, multivariable analysis demonstrated that worse (higher) PHQ-9 scores were independently predictive of lower household capacity to pay (p<0.10) and higher food expenditure (p<0.01).

CONCLUSIONS

This study is the first of its kind in South Africa, identifying household economic factors associated with increased depression symptom severity on a continuum; and demonstrating that financial risk protection efforts are needed across this continuum. The study demonstrates that the relationship between poverty and mental health extends beyond the individual to affect household economic functioning. These findings must be included in policy considerations to achieve effective protection for vulnerable households facing the interaction of depression and adverse economic circumstances.