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Health care cost of floods: Evidence from Typhoon Morakot in Taiwan

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  • Liu, Ya-Ming
  • Kuo, Yen-Lien
  • Chu, Hone-Jay
  • Kuo, Wun-Ci
  • Tseng, Hsin-Chieh

Abstract

Using the difference-in-difference (DID) method, this study uses Typhoon Morakot, which occurred in August 2009, as an example to estimate the effect of flooding on health care cost burden. The main data source is the medical claims records of a cohort of three million patients in Taiwan’s National Health Insurance system. By examining flood-related physiological diseases and disaster-related mental illnesses, our results indicate that the increase in outpatient health care costs resulting from the flood caused by the typhoon is approximately NTD 8.95 billion (USD 280 million), equivalent to approximately 69% of the annual special budget for flooding prevention during the period 2006–2019 in Taiwan. Moreover, the increase in outpatient expenditure for mental illnesses is nearly 10 times that of physiological diseases. An important implication of our findings is that the cost of preventing natural disasters, such as floods, can be offset by saving health care costs, particularly for mental illnesses. Our results also suggest that in addition to providing safe drinking water and indoor residual spraying, offering continuous post-disaster mental health services can further save health care expenditures caused by natural disasters.

Suggested Citation

  • Liu, Ya-Ming & Kuo, Yen-Lien & Chu, Hone-Jay & Kuo, Wun-Ci & Tseng, Hsin-Chieh, 2023. "Health care cost of floods: Evidence from Typhoon Morakot in Taiwan," Journal of Asian Economics, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:asieco:v:87:y:2023:i:c:s1049007823000556
    DOI: 10.1016/j.asieco.2023.101635
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    References listed on IDEAS

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    1. Karlsson, Martin & Ziebarth, Nicolas R., 2018. "Population health effects and health-related costs of extreme temperatures: Comprehensive evidence from Germany," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 93-117.
    2. Hesam Seyedin & Reza HabibiSaravi & Nasrin sayfouri & Vahid Hoseini Djenab & Fariba Ghasemi Hamedani, 2017. "Psychological sequels of flood on residents of southeast Caspian region," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 88(2), pages 965-975, September.
    3. Luciana de Resende Londe & Rodrigo Silva Conceição & Tiago Bernardes & Mariane Carvalho de Assis Dias, 2016. "Flood-related leptospirosis outbreaks in Brazil: perspectives for a joint monitoring by health services and disaster monitoring centers," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 84(2), pages 1419-1435, November.
    4. Michael F. Pesko, 2018. "The Impact Of Perceived Background Risk On Behavioral Health: Evidence From Hurricane Katrina," Economic Inquiry, Western Economic Association International, vol. 56(4), pages 2099-2115, October.
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