The Incidence of High Medical Expenses by Health Status in Seven Developed Countries

Health care policy seeks to ensure that citizens are protected against excessive out-of-pocket (OOP) expenses. Yet rising health care costs are pressuring private and social insurance schemes to shift toward more cost-sharing measures. This paper uses household surveys from seven countries to measure the burden of health expenditures for individuals with similar health conditions. It compares countries based on the extent to which citizens—those with health problems in particular—devote a large share of their income to medical expenses. The paper finds that in all countries but France, and to a lesser extent Slovenia, unhealthy citizens face considerably higher medical costs than do the healthy. As many as one-quarter of less healthy citizens in the U.S., Poland, Russia and Israel have large OOP expenses. The paper finds increased exposure to high medical expenses within countries is also associated with increased disparities between the unhealthy and healthy in the financial burden of OOP costs. The levels of high OOP spending uncovered, and their disparate weight on those with health problems (who are also disproportionately poor and elderly) underscore the potential for high OOP expenses to undermine core objectives of health care systems, including those of equitable financing, equal access, and improved medical outcomes.