Catastrophic health expenditures arising from out-of-pocket payments: Evidence from South African income and expenditure surveys

Abstract

This study examines catastrophic health expenditures and the potential for such payments to impoverish South African households. The analysis applies three different catastrophic expenditure measurements, and we apply them across four South African Income and Expenditure Surveys. Since households have limited resources, they are also limited in their capacity to purchase health care. Thus, if a household devotes a large share of that capacity to health care, it may not be able to cover other necessary expenses, which could be catastrophic. The measurements differ in their definition of household capacity. Despite the differences in measurements, and, therefore, results, we find limited incidence of health care expenditure catastrophe, although larger shares of capacity are being devoted to health care in more recent years. In line with the finding that catastrophe is rare, we find that very few households are subsequently impoverished, because of health care costs.

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