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Francisco Escribano Sotos, Raúl del Pozo Rubio, Isabel Pardo García

THE ECONOMIC CONSEQUENCES FOR HOUSEHOLDS OF COPAYMENTS IN LONG TERM CARE. EVIDENCE FROM SPAIN AFTER 2012 REFORM. Francisco Escribano Sotos, Raúl del Pozo Rubio, Isabel Pardo García. ILPN 2016 CONFERENCE LONDON, 5-7 SEPTEMBER 2016. SUMMARY. 1. SOME PREVIOUS IDEAS 2. MATERIAL AND METHODS

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Francisco Escribano Sotos, Raúl del Pozo Rubio, Isabel Pardo García

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  1. THE ECONOMIC CONSEQUENCES FOR HOUSEHOLDS OF COPAYMENTS IN LONG TERM CARE. EVIDENCE FROM SPAIN AFTER 2012 REFORM Francisco Escribano Sotos, Raúl del Pozo Rubio, Isabel Pardo García ILPN 2016 CONFERENCE LONDON, 5-7 SEPTEMBER 2016

  2. SUMMARY • 1. SOME PREVIOUS IDEAS • 2. MATERIAL AND METHODS • 3. PRINCIPAL RESULTS • 4. DISCUSSION AND CONCLUSION

  3. 1. Someprevious ideas • Total spending on health care and LTC in OECD countries has been increasing in the last years (OECD, 2011, 2015). • In a context of crisis and reduction of public debt, out-of-pockets are a common measure to contain health and long term care expenditure.

  4. 1. Someprevious ideas • There are several studies about the impact of out- of- pockets for drugs and health services, in terms of demand (Drummond and Towse (2012); Xu et al. (2007); Main (2011); Costa-Font and Gemmill (2011); Farbmacher and Winter (2013); Kowalski (2016), but • The effects of out- of- pockets in terms on equity, catastrophe and impoverishment has devoted less attention (Antonanzas and Brías, 2013). • An in general, we can say that the impact of copayments in LTC policies, has not been analyzed in terms of demand or in terms of impoverishement and catastrophism

  5. 1. Someprevious ideas • Considering that copayments are an important way to finance LTC and this measure has been introduced in several countries, the objective of this paper is to analyze the economic consequences for households of copayments in LTC in Spain in terms of impoverishement and catastrophism.

  6. 1. Someprevious ideas • Our analysis is interesting because: • We analyzed the legislative reform in Spain in terms of copayments in LTC after 2012 The study presents measures of impoverishment and catastrophe related to long-term health care expenditure; • It analyses the impact of the 2012 copayment reform on Spanish households; • It quantifies the households which are poorer as a consequence of copayment or which are poor following the copayment reform and those which copayment has left in a catastrophic situation.

  7. 2. Material and methods • The 2008 Survey on Disability, Independent Living and Dependency (EDAD-08), conducted by the Spanish National Statistics Institute, was used to obtain the socioeconomic, demographic and health profile and the characteristics of the environment of people with disabilities in Spain • It also contains information on the income and financial situation of persons with disabilities, a variable required to calculate the copayment corresponding to each dependent person.

  8. 2. Material and methods • The first step was to classify the persons with disability into the levels of dependence defined in the LD • To calculate user copayment, it is previously necessary to identify the cost of the service they receive. To estimate the cost of dependence we assumed common prices in all the regions of Spain and considered the distribution of services published by the Statistics Service of the General Sub-directorate for Valuation, Quality and Assessment (SAAD-IMSERSO) as of 1 January 2011

  9. Cost of dependentcarebenefitbytype in euros

  10. Cost of dependentcarebenefitbytype in euros

  11. Usercopaymentbytype of dependentcarebenefit in euros 2012

  12. Usercopaymentbytype of dependentcarebenefit in euros 2012

  13. 2. Material and methods • Once the copayment is estimated, the aim is to identify to what extent this copayment affects the impoverishment or catastrophic expenditure of families. To this end, we used the measures of impoverishment and catastrophe defined by Wagstaff and Van Doorslaer (2003) • The impoverishment rate refers to the number of households whose equivalent income (xi) is below the so-called poverty threshold • The poverty threshold for 2012 was calculated to be €597.17/month.

  14. 2. Material and methods • In the same way as health care copayments, those for long-term care can also represent a catastrophic expenditure for households if they force individuals or households to suffer a drop in the standards of living now, or in the future (Tomini; Packard and Tomini (2013); Stigilitz (1998). • The catastrophe threshold (zcat) has been defined as a certain percentage of (xi) which households must devote to making the corresponding copayment for dependent care, (copi), in such a way that when a household has to make a payment above the regulatory percentage, this household is classified as catastrophic.

  15. 2. Material and methods • Although setting a cut-off point is arbitrary since a small payment may be catastrophic for a poor household, in the literature, these thresholds range from 5% to 40% (Tomini; Packard and Tomini (2013); Wagstaff and van Doorslaer (2003); Casado (2008); Xu et al. (2005). • In order to analyze the sensitivity of our calculations the regulatory percentages used were 10%, 20%, 30% and 40%.

  16. 3. RESULTS Table 3. Sociodemographic variables by level of dependence EDAD-08.

  17. 3. RESULTS Table 4. Dependent care copayment by level.

  18. 3. RESULTS Table 5. Impoverishment rate of dependent care copayment by level.

  19. 3. RESULTS Table 6. Catastrophic effect of dependent care copayment by level.

  20. 4. DISCUSION AND CONCLUSIONS • This paper analyses the economic impact of dependent care copayment in Spain on the finances of dependent persons. • The reform in 2012 has increased the copayment to be made by dependent persons • Our results show that a dependent person has a mean monthly expenditure ranging from €309.19 for level I dependence to €658.06 for level III. This means that dependent persons are contributing between one- and two-thirds of their income to paying more than 50% of the cost of the services they receive

  21. 4. DISCUSION AND CONCLUSIONS • The higher user contribution means that the financial risk for households with dependent persons is increasingly higher. • Our work, in the same vein as studies assessing the impoverishing impact of health care copayment, examines the catastrophic and impoverishing effects of copayment of long-term care.

  22. 4. DISCUSION AND CONCLUSIONS • Expenditure on the copayment of long term care has a major impact on households with dependent persons in Spain, since one in five households in the case of level I and one of four in the case of levels II and III (23.13% and 27.54%) fall below the poverty threshold after making the copayment. This impoverishing impact of copayment is also found for health care copayment in previous studies, albeit in lower percentages (Xu et al. 2003; Xu et al. 2005; Xu et al. 2007; Tomini; Packard and Tomini, 2013; McIntyre, 2006; Wagstaff and van Doorslaer, 2003)

  23. 4. DISCUSION AND CONCLUSIONS • In terms of catastrophic expenditure, the pattern of behavior is repeated: more than 80% of households dedicate 10% of their resources to paying the cost of dependence, which represents €3,995.1 million (0.38 of GDP). • Following the legislation implemented in 2012, the funding of dependent care causes a risk of impoverishment and catastrophic expenditure as reflected in the percentages of copayment of over 50%.

  24. 4. DISCUSION AND CONCLUSIONS • Our results should serve to develop strategies for protection against the financial risk resulting from facing the costs of a situation of dependence. Furthermore, it seems reasonable that political decision makers should implement policies to reduce social imbalance, in this case, alleviating the financial impact on persons with dependence and providing them with services appropriate to their needs.

  25. ¡THANK YOU! ANNY COMMENTS, SUGGESTIONS ARE WELCOME

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