The Effect of Occurrence and Reoccurrence of Catastrophic Health Expenditure on Transition to Poverty and Persistence of Poverty in South Korea

Kim, Eunkyoung; Kwon, Soonman

Abstract

BACKGROUND
The objective of this study was to examine the effect of occurrence and reoccurrence of catastrophic health expenditure (CHE) on transition to poverty and persistence of poverty in South Korea.
METHODS
The data of the year 2008-2011 from the Korea Health Panel were used. CHE was defined as the share of total health expenditure in a household out of a household's total income at various threshold levels (more than 5%, 10%, 15%, and 20%). The effect of catastrophic expenditure on transition to poverty and persistence of poverty was analyzed through multivariate logistic regression.
RESULTS
The shares of households facing CHE at various threshold levels have increased gradually with 37.7%, 21%, 13.1%, and 9.5% in 2011. Households facing CHE were more likely to experience transition to poverty at thresholds level of more than 5% and 20% in 2010 set. Households facing CHE seemed to experience persistence of poverty, but it was not statistically significant. About 40% of households facing CHE in 2009 encountered another shock of CHE in 2010. Households without CHE seemed to experience more transition to poverty and persistence of poverty, but it was not statistically significant. For household with multiple CHE, those with medical aid were more likely to experience transition to poverty with statistical significance, but the statistical significance disappeared in case of persistence of poverty.
CONCLUSION
The Korean health system needs to be improved to serve as a social security net for addressing transition to poverty and persistence of poverty due to facing CHE.