Impact of Multimorbidity on Household Expenditure in Chinese: Evidence from the China Health and Retirement Longitudinal Study
Authors: Ouyang Mengqian , Liu Bowen , Qiu Zhining , Liao Wang , Chen Tao 
Published: December 2024

Abstract

Background
Multimorbidity presents a considerable economic burden globally, severely impacting individuals' quality of life and driving significant increases in healthcare expenditures. Understanding household expenditure patterns in response to the financial implications of chronic comorbidities is essential for developing effective policies. Insights into these decision-making processes can aid in the development of healthcare policies and financial support systems aimed at alleviating the economic strain on families affected by chronic illnesses.
Methods
This study utilizes data from the China Health and Retirement Longitudinal Study (CHARLS) for the years 2013, 2015, 2018, and 2020. Using a panel Tobit model and cluster analysis, we analyze the effects of the number of chronic diseases and comorbidity patterns on household expenditure levels and structure. Additionally, Recentered Influence Function (RIF) regression is applied to assess the impact of having no chronic disease, one chronic disease, or multiple chronic diseases on the inequality of expenditure proportions. Further, by comparing regression results across sub-samples, we explore the heterogeneous impacts of the quantity of chronic diseases and comorbidity patterns on household expenditure and the interaction effects between chronic diseases and self-rated health status to discuss their roles in influencing household expenditure decisions.
Findings: The presence of multiple chronic diseases in an individual correlates with reduced household survival expenditures and increased medical expenditures, with no significant changes observed in development and enjoyment expenditures. The transition from no chronic disease to chronic disease status significantly widens the disparity between household survival and medical expenditure proportions; however, this widening effect diminishes when moving to chronic disease comorbidity. Heterogeneity analysis shows that high-income households reduce survival expenditures to increase development expenditures to accumulate more wealth and expand budget constraints for the future, while low-income households have limited ability to compress survival expenditures and must reduce both survival and development expenditures to cover medical costs. Furthermore, the impact of multiple chronic diseases on enjoyment expenditures is moderated by self-rated health status, with lower self-rated health intensifying the suppressive effect on enjoyment expenditures.
Interpretation: The macroeconomic impact of chronic comorbidity is significant and unevenly spread across different countries, regions, and income brackets. Our research underscores the critical necessity for global investments aimed at reducing the health and economic challenges associated with chronic comorbidity. Rather than being a financial strain, investing in effective interventions against chronic comorbidity has the potential to yield substantial economic benefits in the near future.