Financial Catastrophism Inherent with Out-of-Pocket Payments in Long Term Care for Households: A Latent Impoverishment

The economic burden incurred by families caring for a young child with developmental disability in Uganda

Each year, nearly 30 million children globally are at risk of developmental difficulties and disability as a result of newborn health conditions, with the majority living in resource-constrained countries. This study estimates the annual cost to families related to caring for a young child with developmental disability in Uganda. Nested within a feasibility trial of early care and support for young children with developmental disabilities, this sub-study estimated the cost of illness, the cost of paternal abandonment of the caregiver and the affordability of care by household. Seventy-three caregivers took part in this sub-study. The average annual cost of illness to families was USD 949. The main cost drivers were the cost of seeking care and income lost due to loss of employment. Households caring for a child with a disability spent more than the national average household expenditure, and the annual cost of illness for all households was more than 100% of the national GDP per capita. In addition, 84% of caregivers faced economic consequences and resorted to wealth-reducing coping strategies. Families caring for a child with severe impairment incurred USD 358 more on average than those with mild or moderate impairment. Paternal abandonment was common (31%) with affected mothers losing an average of USD 430 in financial support. Caring for a young child with developmental disability was unaffordable to all the study households. Programmes of early care and support have the potential to reduce these financial impacts. National efforts to curb this catastrophic health expenditure are necessary.

[The impact of a full implementation of the Action Plan on Dependency 2021-2023 on the Spanish economy]

OBJECTIVE

To assess the impact on the economy of the implementation of the Action Plan on Dependency (APD), devised by the Spanish government as a first measure to tackle the major shortages in Dependency Services brought to light pursuant to COVID-19 pandemic. The APD establishes as priority areas the suppression of waiting lists, the improvement of dependency services, with a focus on home-care, and the professionalization and stabilization of employment.

METHOD

To achieve this goal, first, an estimate of the increased demand for benefits and services in 2023 has been carried out, supposing that all the priority measures established in the PCD in 2021 are fully implemented. Then, the impact of investment on the economy has been measured using multisector modeling. This analysis considers not only the direct economic impact on the sectors providing services to dependent population, but also the indirect and induced impact on the economy as a whole.

RESULTS

The total public investment required for the plan in 2023 will reach 13,962 million Euro, which represents around 1% of the GDP. The impact on the economy in terms of production is expected to reach 41,570 million, while the impact on gross value added will be 21,046 million, together with the creation of nearly 440,000 jobs.

CONCLUSIONS

The results reveal that, for the APD to be fully implemented, public funding needs to be increased way beyond the occasional allocation of funds established in the Recovery, Transformation and Resilience Plan. These investments have a positive impact not only on the social and welfare sector, but also on the country's economy.

Long-term care insurance and multidimensional poverty of middle-aged and elderly: Evidence from China

Introduction

This paper examined the impact of public long-term care insurance (LTCI) pilots in China on the multidimensional poverty status of middle-aged and older adults.

Methods

Using panel data from the China Health and Retirement Longitudinal Survey, we utilized LTCI pilots conducted in different cities from 2012 to 2018 and assessed the impact of LTCI using a difference-in-differences strategy.

Results

We found that the implementation of LTCI reduces the multidimensional poverty of middle-aged and older adults and their likelihood of future multidimensional poverty. LTCI coverage was also associated with a reduction in the likelihood that middle-aged and older adults in need of care fall into income poverty, living consumption poverty, health poverty, and social participation poverty.

Discussion

From a policy perspective, the findings of this paper suggest that the establishment of an LTCI system can improve the poverty of middle-aged and older adults in several ways, which has important implications for the development of LTCI systems in China and other developing countries.

The Effect of the "Triple-Layer Medical Security" Policy on the Vulnerability as Expected Poverty of Rural Households: Evidence from Yunnan Province, China

China launched the "critical battle against poverty" nationwide in 2012. As its main battlefield, Yunnan province promulgated the "triple medical security" (TMS) policy in 2017. This study, based on the pooled cross-section database of 2015-2020 of registered poor households in Yunnan province, employed the logit model to examine the effect of TMS on the vulnerability as expected poverty (VEP) of these households. It found that increasing the reimbursement rates for overall medical expenses and inpatient expenses and decreasing the proportion of out-of-pocket medical payment to income reduced the VEP; increases in the number of sick people in the family increased its VEP, and although the increase in the reimbursement rate for overall medical expenses or for inpatient expenses partially offset the VEP caused by the increase in the number of chronically ill people in the family, the VEP caused by the increase in the number of critically ill people would increase in the short term with the increase in the reimbursement rate for overall medical expenses or for inpatient expenses. The findings help improve policies concerning the medical security and health of the rural poor population, providing theoretical reference and practical guidance for future research.

Financial social protection and individual out-of-pocket costs of long-term care in the USA and Europe: An observational study

BACKGROUND

Empirical evidence informing policies aiming at ensuring affordability of long-term care (LTC) costs is limited. Combining system-level with individual-level data, we quantify the burden of out-of-pocket costs of LTC services on households in 13 European countries and the USA and explore how social protection systems impact affordability of care.

METHODS

In this observational study, we use harmonised data from the Health and Retirement Study (HRS), collected between 2012 and 2016, and from the Survey of Health, Ageing and Retirement in Europe, collected between 2013 and 2017. We assess the severity of LTC needs of older adults (65+) on the basis of self-reported limitations in activities of daily living (ADLs) and instrumental activities of daily living (IADLs). We classify countries' social protection systems in terms of affordability and progressivity using information obtained from country officials. We examine variation in individual-level out-of-pocket LTC costs by social protection systems' affordability and progressivity.

FINDINGS

Out-of-pocket LTC costs are heterogeneous across countries and increase with individuals' needs. In countries where LTC is more affordable and social protection systems less progressive, older adults incur significantly lower levels of LTC costs. Within Europe, not only are costs lower where systems are characterized by higher affordability and lower progressivity, but they also represent a lower share of households' disposable income.

INTERPRETATION

Our findings indicate that the social protection systems significantly affect the level of out-of-pocket costs faced and reported by older adults with LTC needs as well as the share of their income that is devoted to pay for care.

FUNDING

We received funding from the National Institute on Aging (grant number R01 AG030153). The OECD programme of work on ageing and long-term care is partly funded by the European Union.

Health Care Utilization and Out-of-Pocket Payments among Elderly with Cognitive Frailty in Malaysia

Background: Cognitive frailty (CF) as a potential risk factor for dementia, functional disability, poor quality of life, and mortality. The aim of this study was to explore the health care-related utilization and out-of-pocket (OOP) expenditures, sociodemographic characteristics, and comorbidities among elderly Malaysians with CF. Methods: A cross-sectional study targeting elderly Malaysian aged ≥65 years was conducted. The study included all participants of the fourth phase of the Malaysian representative Long-Term-Research-Grant-Scheme Towards-Useful-Aging (LRGS-TUA) community-based study. A structured and validated interview questionnaire was used. Results: In total, 1006 elderly were interviewed, with a 66.18% response rate. Only 730 respondents met the inclusion criteria. Of the eligible respondents, the CF prevalence was 4.5%. Around 60.6% of the participants with CF had utilized outpatient care at government clinics within the past 6 months. The estimated mean total OOP payments for CF during the past 6 months was 84 Malaysian Ringgit (RM) (SD 96.0). Conclusions: CF among elderly Malaysians is within the internationally recognized range of prevalence. The OOP payments for seeking health care among CF elderly are not different from that of other elderly categories. There is a high possibility of underutilization of the health care services of CF cases while they are still needy.

Catastrophic Household Expenditure Associated with Out-of-Pocket Healthcare Payments in Spain

Background. The financial effect of households’ out-of-pocket payments (OOP) on access and use of health systems has been extensively studied in the literature, especially in emerging or developing countries. However, it has been the subject of little research in European countries, and is almost nonexistent after the financial crisis of 2008. The aim of the work is to analyze the incidence and intensity of financial catastrophism derived from Spanish households’ out-of-pocket payments associated with health care during the period 2008–2015. Methods. The Household Budget Survey was used and catastrophic measures were estimated, classifying the households into those above the threshold of catastrophe versus below. Three ordered logistic regression models and margins effects were estimated. Results. The results reveal that, in 2008, 4.42% of Spanish households dedicated more than 40% of their income to financing out-of-pocket payments in health, with an average annual gap of EUR 259.84 (DE: EUR 2431.55), which in overall terms amounts to EUR 3939.44 million (0.36% of GDP). Conclusion. The findings of this study reveal the existence of catastrophic households resulting from OOP payments associated with health care in Spain and the need to design financial protection policies against the financial risk derived from facing these types of costs.