Analysis of Catastrophic Expenditures on Medicine

This study analyzes catastrophic expenditures on medicine in Russia. Catastrophic expenditures on medicine occur if households’ private expenditures on medicine are equal or exceed the established threshold of household’s solvency. In the following research, this threshold was estimated using empirical methods within the context of Russian economic situation. In addition, this study identifies some Russian households’ characteristics that lead to the incurrence of catastrophic expenditures on medicine in order to reveal their determinants. Many external academic studies have explored catastrophic expenditures specifics in developed or developing countries, but no research of that kind had been conducted for Russian households. The study demonstrates that households with elderly family members or ones with a chronic illness or disability are more vulnerable to incur the catastrophic expenditures on medicine. For the such households, the critical threshold for the catastrophic expenditures incurrence was estimated to be equal to 55 years old if household members had low health level at the same time. Moreover, it was revealed that the only factor to reduce the probability of catastrophic expenditure incurrence is a high level of education, while household’s income does not decrease this probability in some cases.