Abstract:
This study examines catastrophic health expenditures and the potential for such payments
to impoverish South African households. The analysis applies three different catastrophic
expenditure measurements, and we apply them across four South African Income and
Expenditure Surveys. Since households have limited resources, they are also limited in their
capacity to purchase health care. Thus, if a household devotes a large share of that capacity
to health care, it may not be able to cover other necessary expenses, which could be catastrophic.
The measurements differ in their definition of household capacity. Despite the differences
in measurements, and, therefore, results, we find limited incidence of health care
expenditure catastrophe, although larger shares of capacity are being devoted to health
care in more recent years. In line with the finding that catastrophe is rare, we find that very
few households are subsequently impoverished, because of health care costs.
