Crowding-Out Effect of Out-of-Pocket Health Expenditures on Consumption Among Households in Mongolia

Abstract

Background: High out-of-pocket (OOP) health expenditures are a common problem in developing countries. Studies rarely investigate the crowding-out effect of OOP health expenditures on other areas of household consumption. OOP health costs are a colossal burden on families and can lead to adjustments in other areas of consumption to cope with these costs. Methods: This cross-sectional study used self-reported household consumption data from the nationally representative Household Socioeconomic Survey (HSES), collected in 2018 by the National Statistical Office of Mongolia. We estimated a quadratic conditional Engel curves system to determine intrahousehold resource allocation among 12 consumption variables. The 3-stage least squared method was used to deal with heteroscedasticity and endogeneity problems to estimate the causal crowding-out effect of OOP. Results: The mean monthly OOP health expenditure per household was ₮64 673 (standard deviation [SD]=259 604), representing approximately 6.9% of total household expenditures. OOP health expenditures were associated with crowding out durables, communication, transportation, and rent, and with crowding in education and heating for all households. The crowding-out effect of ₮10 000 in OOP health expenditures was the largest for food (₮5149, 95% CI=−8582; −1695) and crowding-in effect was largest in heating (₮2691, 95% CI=737; 4649) in the lowest-income households. The effect of heating was more than 10 times greater than that in highest-income households (₮261, 95% CI=66; 454); in the highest-income households, food had a crowding-in effect (₮179, 95% CI=-445; 802) in absolute amounts. In terms of absolute amount, the crowding-out effect for food was up to 5 times greater in households without social health insurance (SHI) than in those with SHI. Conclusion: Our findings suggest that Mongolia’s OOP health expenses are associated with reduced essential expenditure on items such as durables, communication, transportation, rent, and food. The effect varies by household income level and SHI status, and the lowest-income families were most vulnerable. SHI in Mongolia may not protect households from large OOP health expenditures.

A Country-Level Empirical Study on the Fiscal Effect of Elderly Population Health: The Mediating Role of Healthcare Resources

“…Healthcare is the main aspect of public services, which is related to the livelihood of the country; thus, the government has a responsibility to provide basic healthcare services. Accordingly, the budget structure is adjusted to increase healthcare resources, forming a crowding-out effect [ 47 ]. This can also be analyzed from the perspective of supply and demand, whereby an increased elderly health burden leads to a rise in a society’s healthcare on the demand side; hence, the government has to increase the fiscal investment to meet the growing health demand on the supply side [ 48 ].…”

Household costs and care seeking patterns associated with COVID-19 in Blantyre, Malawi

“…In other words, it does not consider nor provide insight about households as potential financiers of COVID-19 care. Yet, studies have demonstrated the potential crowding out effects of household health payments on consumptions and on the risk for catastrophic health expenditures [8][9][10]. In Malawi, households contributions towards total health expenditure accounts for 12% and this contribution has been increasing consistently since 2012/13 [11].…”

Economic Implications of Health Care Burden for Elderly Population

“… 19 , 20 One probable reason is that poor health makes it difficult to accumulate human capital and create an effective labor force, 21 while another is that the burden of disease may increase families and countries’ health-related expenditure. 22 , 23 In fact, the burden of disease among the elderly population could increase families’ caregiving burden, affecting resource allocation and labor employment within the household. 24 , 25 The family caregiving burden depends primarily on the health status of older adults, for example, their ability to perform the activities of daily living and instrumental activities of daily living, and their need for assistance with activity limitations, as well as time spent in a hospital or in bed with a serious illness.…”