HEALTH EXPENSES IMPACT ON HOUSEHOLD CAPABILITIES AND RESOURCE ALLOCATION
Significant health expenses can force households to reduce consumption of items required for daily living and long-term flourishing, depriving them of the capability to lead economically stable and healthy lives.
We re-conceptualized the impact of health expenses on households in terms of capabilities and flourishing. We compared consumption patterns between households with and without inpatient treatment, and between households with different levels of outpatient treatment.
We found that compared to households without inpatient treatment and with lower levels of outpatient treatment, households with inpatient treatment and higher levels of outpatient treatment reduced investments in basic capabilities, as evidenced by decreased consumption of food, education and production means. The lowest income quartile showed the most significant decrease. No quartile with inpatient or high-level outpatient treatment was immune to reductions.
Our study highlights that health expenses are associated with decrements in multiple areas of household flourishing. Our study indicates that poorer households have disadvantages that could worsen their situation when ill. The effects of health expenses on consumption pattern might well create or exacerbate poverty and poor health, particularly for low income households. While the mean health care consumption is similar between income levels, health expenses constitute a much greater percentage of household allocations for lower income households. While higher- income households can reduce purchase of expendable items to pay health care costs, lower-income households lack such flexibility. Instead, they reduce more essential consumptions (food, education, and production means) that impact basic capabilities. Higher income quartiles also decrease spending in some of these areas, indicating that they are not immune to detrimental effects of health costs on basic capabilities. Their decreases were less, emphasizing the greater vulnerability of poor households. Health policy reforms are needed to prevent this economic and social burden.