Comparative Study On The Measurements Of Catastrophic Health Expenditure

Alleviating household catastrophic health expenditure(CHE)is one of the vital objectives of health systems defined by the World Health Organization.However,no consensus has yet been reached on the measurements of CHE.With the purpose of further relieving CHE and alleviating the problem of illness-caused poverty,Critical Illness Insurance(CII)program has been launched since 2012 in China.In order to verify whether different international measurements of CHE matter under China’s CII program,the paper compares two-layer CII models built on the basic approach and the ability-to-pay approach.Exploiting China Family Panel Studies dataset(2010-2018),the paper constructs two-layer CII models,uses incidence and severity indicators to evaluate the performances of the compensation mechanism,introduces the idea of commercial health insurance premium determination for corresponding premium pricing,and conducts fund balance calculations based on the design goal of "guarantee meager profit" of the compensation mechanism.The empirical results show that: First,CII programs under the two measurements of CHE can both alleviate households’ CHE effectively.Second,the CII model based on the basic approach can reduce the incidence,average severity,and overall severity of CHE to a lower level.The CII model based on the ability-to-pay approach can reduce regional severity of CHE to a lower level.Third,based on the basic approach,the 25%threshold is suitable for reducing the incidence of CHE,and the 10% threshold is suitable for reducing the financial burden of families suffering from CHE.Fourth,based on the ability-to-pay approach,when there is only the first-level CII,the 40% threshold performs better in reducing the incidence and severity of CHE,while when there is the two-layer CII,the 25% threshold performs better.Three policy suggestions are proposed based on the above conclusions: First,the CII program can effectively reduce the risk of CHE,so it needs to be widely promoted.Second,in order to improve the program’s effectiveness,China’s CII program should be based on the basic approach.Third,the threshold in the model used to measure CHE should be determined by the goal pursued by the CII program.