Financial catastrophism inherent with out-of-pocket payments in long term care for households: a latent impoverishment

Abstract

Background Out-of-pocket (OOP) payments are configured as an important source of financing long-term care (LTC). However, very few studies have analyzed the risk of impoverishment and catastrophic effects of OOP in LTC. Objective To estimate the contribution of users to the financing of LTC and to analyze the economic consequences for households in terms of impoverishment and catastrophism. Data and Methods The data base which was used is 2008 Spanish Disability and Dependency Survey, projected to 2012. We analyze the OOP payments effect associated to the impoverishment of households comparing volume and financial situation before and after OOP payment. At the same time, the extent to which OOP payment had led to catastrophism was analyzed using different thresholds. Results The results show that contribution of dependent people to the financing of the services they receive exceeds by 50% the costs of these services. This expenditure entails an increase in the number of households that live below the poverty. In terms of catastrophism, more than 80% of households dedicate more than 10% of their income to dependency OOP payments. In annual terms, the catastrophe gap generated by devoting more than 10% of the household income to dependent care OOP payment reached €3,955, 1 million (0,38% of GDP). Conclusion This article informs about consequences of OOP in LCT and supplements previous research that focus on health. Our results should serve to develop strategic for protection against the financial risk resulting from facing the costs of a situation of dependence.

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

“… 10 , 11 Existing research has focused on single countries and assessed the risk of poverty due to out-of-pocket expenses for LTC services across different segments of the population. 12 , 13 , 14 , 15 International comparisons are limited to LTC services' access, and do not consider level of spending on and affordability of LTC services. 16 Some studies explore institutional differences in LTC needs assessments and eligibility for public support across countries, but adopt a qualitative rather than a quantitative approach.…”