Catastrophic healthcare expenditure during economic recession in the field of cardiovascular disease

Abstract

Economic crisis drives many governments into drastic spending cuts in order to minimize their healthcare costs, resulting in an increase of out-of-pocket payment. This causes mainly the most vulnerable social groups, not only in poor countries, to lose their access to quality care and their ability to pay, and leads them in to catastrophic healthcare expenditures. Questions about whether health spending can be catastrophic rise across nations where there is an income reduction, unemployment and serious or chronic illness. Cardiovascular disease is the number one cause of death today. The first cost-of-illness study, which estimated the costs of cardiovascular disease in the EU in 2003, found them to be €169 billion a year, while the most recent, in 2009, estimated them at nearly €196 billion a year. Financial protection measures must be taken by governments in order to protect their citizens, particularly the most vulnerable ones.

Keywords::

• catastrophic health expenditure
• cardiovascular diseases
• economic recession
• out-of-pocket
• social health insurance systems

Health is a human right and a prerequisite for economic and social development of any country. If we want to ensure a healthy population we must have a ‘healthy’ healthcare system. Two of the fundamental goals of every healthcare system are: first, to ensure that all people have access to high quality care; and second, that all people have the affordability to pay for these services in order to maintain and improve their health status. In accordance with this rule, governments, policy makers, regulators, providers, tax payers and many other groups, often with conflicting interests, must work hard in order to achieve it. Many healthcare systems around the world, especially nowadays in the era of economic recession are funded primarily through out-of-pocket (OOP) payments, allowing the governments to minimize their healthcare cost. An OOP expense is a non-reimbursable expense paid by the patient. This way of payment prevents large groups of people from having access to health services because of their inability to pay, leading them to catastrophic health spending and even to impoverishing expenditures [1]. Due to the economic recession, there is a growing interest in the literature related to the effects of health expenditure on national economies and household finances around the world. Results from multinational studies or single countries have been published. Some studies publish results from groups of countries [2,3] and others from individual countries [4,5]. Moreover, scientists study specific diseases and their impact on families’ health spending [6,7]. All these studies research, at the microeconomic level which focuses on the impact of health expenditures on individuals, on household level or at the macroeconomic level which focuses on the national healthcare expenditures. According to Russel, the term catastrophic implies that such expenditure levels are ‘likely to force households to cut their consumption of other minimum needs, trigger productive asset sales or high levels of debt and lead to impoverishment’ [8]. There are three factors that lead to catastrophic payments, they are [2,9]: the availability of health services requiring OOP payments; low household capacity to pay; and lack of prepayment mechanisms for risk pooling. In literature, catastrophic expenditure is measured as OOP health expenditure that exceeds some fixed proportion of household income or household's capacity to pay. In their article in Lancet, Xu et al. in order to explore variables associated with catastrophic health expenditure of households across 59 countries, defined expenditure as being catastrophic, if a household's financial contribution to the healthcare system exceeds 40% of the remaining income, after subsistence needs have been met [2]. Some other authors regard 10% of household income being consumed by healthcare expenditure as potentially catastrophic [10,11]. In a past study of Wyszewianski [12], it was proposed that ‘financially catastrophic’ will be used to describe cases whose expenditures are high in relation with their ability to pay (e.g., when OOP medical expenditures exceed 15% of annual family income).

Globally it is estimated that 150 million people suffer financial catastrophe each year due to healthcare payments and about 100 million are pushed into poverty because of OOP payments. Low- and middle-income countries use mostly tax-based systems while countries with high income and a relatively high level of prepayment in their total health spending; mostly implement social health insurance (SHI) systems. That does not mean that low-income countries with low prepayment levels should exclude SHI in the long term. No one can defend, for sure, that SHI offers better or worse protection than tax-based system and vice versa. Prepayment mechanisms protect people from financial catastrophe. Moving away from OOP mechanisms is the key to reduce financial catastrophe. On the other hand, there is no magic formula which can help poor countries to rely on prepayment mechanisms and minimize OOP payments. The choice between increasing prepayment through taxes or some kind of insurance contribution lies mainly on a county's structure, culture tradition and, most important, economic development [13]. Research has shown that older people spend more on healthcare expenses than younger adults. Desmond et al. reported data over the 6 year period from 1998–2003 in the USA where all signs point toward sustained increases in OOP healthcare spending for people of all ages. On age classification, people older than 65 years spend 10% of their income on OOP healthcare and around 3% on prescription drugs, while individuals younger than 65 years devote only 2% of their earnings on healthcare and around 0.5% on medicines [14]. Catastrophic healthcare payments occur in both rich and poor countries, but over 90% of the people affected, reside in low-income countries [2].

The epidemiological burden of cardiovascular diseases

According to WHO, cardiovascular diseases (CVDs) are the most common cause of death, globally: more people die annually from CVDs than from any other cause. An estimated, 17.3 million people died from CVDs in 2008, representing 30% of all global deaths [101]. Over 80% of CVD deaths took place in low- and middle-income countries and occurred almost equally in men and women. By 2030, almost 25 million people will die from CVDs, mainly from heart disease and stroke. CVDs are projected to remain the single leading cause of death. In the European continent also, CVD is the leading cause of morbidity and mortality. CVDs are responsible for almost 50% of deaths, causing over 4.3 million deaths each year in the 52 member countries of the European region and >2 million deaths each year in the EU [15].

Economic impact of CVDs

There are not many cost of illness studies about CVDs. The first cost-of-illness study in 2003, estimated the costs of CVD in EU [16] (macroeconomic level) and found the total cost of CVD, to be €169 billion/year. This cost includes primary care, accident and emergency care, hospital inpatient care, outpatient care and medications. In 2009, the total cost of CVD was found to be nearly €196 billion, this cost includes direct healthcare costs, productivity loss due to mortality, productivity loss due to morbidity and informal care costs [17–19]. A recent paper in worldwide sample which used a country growth regression framework for the time period from 1960–2000, reported that CVDs are detrimental to growth, but only when the countries have reached a fairly high level of per capita income [6]. This should not however, be misunderstood. Even the developing countries will face the same problem by increasing people's income. CVDs cost to the healthcare systems of the EU which was estimated to be just under €110 billion in 2006. This represents a cost per capita of €223 per annum, (from €34 in Romania to €413 in Germany), around 10% of the total care expenditure around the EU. The non-healthcare cost is not negligible. In 2006, production losses due to the mortality and morbidity associated with CVDs cost the EU almost €41 billion: €26.9 billion due to death and €13.9 billion due to illness, in those of working age. The cost of informal care (non–health cost) is also important for people with CVDs, as these costs are just under €42 billion. All above results in a total cost of €192 billion/year, due to CVDs. This represents a total annual cost per capita €391 (€60/capita/year in Bulgaria to over €600/capita/year in Germany and the UK) [15].

Macroeconomic & microeconomic: point of view of healthcare costs

In a macroeconomic level, the countries have costs from screening tests, diagnostic tests, medications, hospital and other costs due to CVDs [16]. Moreover, CVDs reduce life expectancy, quality of life and productivity. Unfortunately, today due to economic crisis, it is very common for the policymakers to build or reform healthcare systems around numbers, targets and instructions but not on the basis of patients’ point of view. In times of economic recession many nations wish to reduce their health expenditures and in their efforts to achieve this, they adopt a variety of health policies, [20–26]. They exclude from formulary drugs and don't cover diagnostic or laboratory examinations. The money which the states no longer contribute, is now required to be contributed by the patients and their families. Many factors are associated with the ability of patients and their families to cope with these additional costs. Furthermore, this way of acting, brings to the fore numerous important ethical issues. According to Kentikelenis et al. in a recent correspondence article in Lancet [27], with the impressive title ‘Health effects of financial crisis: omens of a Greek tragedy’, Greece has been more affected by the financial crisis than any other European country. Increased unemployment, reduction of national product, financial debts are some of the elements of socioeconomic environment in Greece. Moreover, in an effort to finance debts in the health sector the ordinary people are paying the ultimate price: not only they lose access to care and preventive services and face higher risks of diseases but also in the worst cases, they lose their lives. Greater attention to health and healthcare access is needed in order to ensure that the Greek crisis does not undermine the ultimate source of the country's wealth, its people.

Conclusion

According to the literature, catastrophic health expenditure is not rare and are found not only in poor countries but elsewhere too. It is easily understood that if OOP spending on healthcare increases more than the increase in income, family income decreases, raising concerns about the affordability and the access of medical care, particularly across vulnerable groups. Questions are raised about whether health spending can be a catastrophic rise across nations in cases where there is a reduction of income, unemployment, serious or chronic illness. Under enormous pressure, governments have to cut healthcare costs and improve system efficiency. In this effort often mistakes are made, piecemealed approaches are followed and that can have negative consequences on population health. These governments should adopt policies protecting the vulnerable population such as investments in preventive services and social support. At the same time, the economic crisis is creating many opportunities for revision, modernization, strengthening systems and health policies. We estimate that policies that reduce health costs and are adopted after only economic analysis can reduce operational cost for a short-term but in a long-term the social cost increases. More research is required in order to determine whether the households are affected by catastrophic health expenditures due to CVDs or not. Today more than ever health policies must achieve both, cost reduction and quality health to all people especially to vulnerable social groups. Any country that wishes equal medical treatment for each and one citizen must take proper financial measures and look beyond and above the economic recession.

Financial & competing interests disclosure

The authors have no relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties.

No writing assistance was utilized in the production of this manuscript.