Catastrophic health care expenditures in Portugal between 2000-2010: Assessing impoverishment, determinants and policy implications

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Economics from the NOVA – School of Business and EconomicsObjectives: This work assesses the extent and evolution of catastrophic health care expenditures (CHE) in Portugal in the years of 2000, 2005 and 2010, to reveal household factors predicting this outcome, and simulates changes in 2010 CHE levels’ following recent reforms in user charges and prices of pharmaceutical products. Methods: The main contribution of this paper is the calculus and analysis of statistical measures to capture CHE incidence, intensity, income distribution and impoverishment effects on households using INE Household Budget Surveys. A logistic model to determine statistical significance and economic effects of 38 variables on the incidence of CHE is also estimated. Finally, a scenario analysis is presented to analyse reforms concerning user charges and prices of pharmaceuticals. Results: Incidence and intensity of CHE decreased between 2000 and 2010, from 5,005% to 2,439% and 4,693% to 0,334%, respectively. During the period, CHE were concentrated amongst the poorer income quintiles. Statistical significance in CHE prediction for all analysed years was observed for households’ income, smoking and drinking habits, area of the house and secondary education of the household head. Scenario analysis shows that the new levels of user charges in 2012, even if mitigated by the new and enlarged economic exemptions, would increase CHE incidence of 2010 to 3,529%. On the other hand, the reduction in the price of ambulatory pharmaceuticals in 2011 and 2012 is effective in reducing CHE incidence, for price demand elasticities equal or smaller (in absolute value) than 0,4. When the two effects are combined, CHE incidence increases, meaning that reductions in the price of pharmaceuticals are not sufficient to countervail the changes in user charges, even with enlarged economic exemptions