Financially catastrophic and high-cost cases: definitions, distinctions, and their implications for policy formulation.
To facilitate discourse and improve the formulation of policy, a clear distinction should be made between financially catastrophic and high-cost health care expenditures. I propose that "financially catastrophic" be used to describe cases whose expenditures are large relative to ability to pay (e.g., when out-of-pocket medical expenditures exceed 15% of annual family income) and that "high cost" describe cases whose total expenditures exceed a set amount (e.g., $10,000 in a year's time) regardless of source of payment or ability to pay. Using these distinctions, I show how third-party coverage and other resources determine whether a high-cost case or illness is also financially catastrophic. I illustrate the usefulness of the proposed categorization by applying it to several current policy issues.
D000163:Acquired Immunodeficiency Syndrome / Q000191:economics; D002388:Catastrophic Illness / Q000191:economics*; D003365:Costs and Cost Analysis; D005102:Health Expenditures; D006291:Health Policy; D006801:Humans; D007354:Insurance, Major Medical; D006278:Medicare; D009310:National Health Insurance, United States; D011050:Policy Making; D014481:United States