The Financial Burden of Catastrophic Health Expenditure on Households with Chronic Diseases: Financial Ratio Analysis

Background: The financial status of households is vulnerable to chronic disease related to high medical expenses and income loss; The financial strain could be assessed by the five indicators. household surplus indicator, liquid asset/debt ratio, solvency indicator, and liquidity indicator.Purpose: We investigated the association between catastrophic health expenditure (CHE) and financial ratio indicators in households with chronic disease in South Korea. Methodology: To determine the financial strain, thresholds were applied to the financial ratios. We conducted multiple logistic regression to figure out whether CHE is associated with financial strain. Furthermore, we analyzed the effect of CHE on absolute finance size, which is basic financial indicators, by multiple linear regression.Results: When CHE occurred, all of the financial ratio indicators deteriorated. However, it was not due to decreases in the absolute size of wealth, income, but rather the relative balance between finances. Especially, the loss of the liquid assets was the major factor of deterioration. Also, all types of labor-related income deteriorated. Only the private transfer income increased.Conclusion: This study revealed that CHE in households with chronic disease negatively impacts the household's finances. It turned out that the financial coping strategies are only resource-consuming.