financial risk

Considering the high prevalence and burden of cardiovascular diseases in Iran and the health expenditures imposed on households, the present study aimed to investigate the catastrophic and impoverishing health expenditures among households having cardiovascular patients.

This descriptive-analytical and cross-sectional study was conducted from March 2017 to September 2017. Data were collected from 385 patients who referred to the three main hospitals providing cardiovascular care in Tehran. Demographic and socioeconomic data, household income, out-of-pocket payments of households having cardiovascular patients were collected via face-to-face interviews and based on the expenditure part of the World Health Organization’s Health Survey questionnaire. The occurrence of catastrophic and impoverishing health expenditures due to cardiovascular care was calculated by income deciles. To identify the determinants of catastrophic and impoverishing expenditures, logistic regression was used.

In this study, 24.6% of all households having cardiovascular patients experienced catastrophic health expenditures. Furthermore, the extent of experiencing impoverishing expenditures was 3.8% among the households. The variables such as education level, type of health insurance, household income, outpatient and inpatient expenditures had a significant relationship with the occurrence of catastrophic health expenditures. Moreover, the type of health insurance, household income, and inpatient expenditures had a significant relationship with the incidence of impoverishing health expenditures.

Mechanisms such as the development of financial risk pooling in the cardiovascular care setting, using generic medicines instead of brand names in patients and excluding poor patients’ from payments can be effective for financial empowerment and reduction of the catastrophic and impoverishing health expenditures among cardiovascular patients.

In 2012, Switzerland changed from retrospective to prospective hospital payment based on diagnosis related groups (DRGs), following the example of the United States, Australia, and Germany. As in these countries, the objective of this transition was to motivate hospitals to improve efficiency by making them bear financial risk to some extent. This contribution seeks to find out whether SwissDRG, the Swiss version of DRG payment, indeed provides hospitals with appropriate incentives, thus creating a level playing field enabling workable competition between them. Three conditions for creating a level playing are stated, of which the first is tested using data on some 757 000 patient cases treated by 93 hospitals in the year 2012. The evidence suggests that hospital payment as currently devised by SwissDRG fails to create a level playing field. Differences in margins over cost of treatment can be traced to a hospital’s portfolio of specialties and mix of patients, both of which are largely beyond their control. The findings of this paper are subject to several limitations. The true DRG-specific cost distributions (and hence expected values) are not known; moreover, emphasis has been on variable cost, neglecting fixed (capital user) cost. Finally, hospitals with a high amount of capital user cost may well benefit from modern technology contributing to their efficiency in terms of variable cost. The finding that current hospital financing by SwissDRG fails to create a level playing field is likely to be robust, calling for an expeditious adjustment be-cause hospitals are exposed to financial risk to a greatly differing degree. It may be appropriate for them to purchase insurance against their financial risk, which is largely driven by influences beyond their control.