Estimating health expenditure shares from household surveys

Abstract

Health expenditure share, or the percentage of the household expenditure spent on health care, is an important variable in health financing research. Studies have shown that health expenditure share estimates derived from household expenditure surveys have problems with “reliability, validity, and comparability”. For example, two nationally representative surveys conducted in the Philippines in 2003 reported widely different health expenditure shares – 1.3% and 7.7%. One wonders which of the two estimates is a more accurate reflection of reality.

An extensive literature exists on the sources of bias in surveys. However, few studies have explored how biases affect estimates of out-of-pocket household health expenditure. Lu et al. examined how the number of questions on health expenditure and the recall period of a survey affected estimates of household out-of-pocket payments and catastrophic expenditure on health. Their study analysed data from the World Health Surveys (WHS) for 43 countries and from the Living Standards Measurement Survey (LSMS) for three countries. They found that estimates of health spending were lower when the survey had fewer questions and that the estimates were higher when the recall period was shorter. Heijink et al. conducted an exhaustive review of the evidence surrounding measurement errors in self-reported household expenditure and health expenditure. They also collected 90 household expenditure surveys from the International Household Survey Network (IHSN). Their findings concurred with those of Lu et al.: households reported higher health expenditures when more questions were asked. The authors reported that the influence of the recall period was unclear, but that the mode of data collection, such as a diary versus face-to-face interviews, did affect the estimates. Most of the studies identified by Heijink et al. concluded that diaries yielded lower expenditure; one study showed conflicting results. Heijink et al. also suggested that the questionnaire’s structure affects the results. In some surveys, health expenditure questions are included within the health module, whereas in others they are placed within the household expenditure module.

As noted, previous studies have identified the direction of the biases inherent in health expenditure share estimates. Our study, however, is the first to quantify the effect of these biases. We analyse multiple surveys per country or territory and show how the estimated share of the household expenditure devoted to health (i.e. health expenditure share) would have varied if survey instruments with different characteristics had been employed. Our contribution makes it possible for analysts to compare health expenditure share estimates across surveys. At the end of the paper we raise some points to be considered when conducting cross-country comparisons of household survey data.