Development of a Novel, Objective Measure of Health Care–Related Financial Burden for U.S. Families with Children

In the United States, steadily rising health care expenditures comprise a substantial portion of our national economy and affect the personal economy of nearly every family (Martin et al. 2012). Particularly in light of the recent recession, managing these rising costs is increasingly problematic for U.S. families, as there have not been commensurate increases in family income and families may not be protected by the provision of health insurance benefits (DeNavas-Walt, Proctor, and Smith 2012). Even the insured face mounting out-of-pocket health care costs (OOPCs) stemming from increased cost-sharing, such as higher premiums, deductibles, copayments, and reduced benefits (Gabel et al. 2003; Yu, Dick, and Szilagyi 2008; Whitmore et al. 2011). While such rising health care costs and insurance issues have the potential to be at least partially mitigated through recent federal legislation (i.e., the Affordable Care Act), the extent to which these problems will wax or wane as health reform is rolled out remains unknown. The rise in OOPC may place a heavy financial burden on U.S. families, affecting their access to needed care (Wisk and Witt 2012) and ultimately their subsequent health outcomes. Many families will experience some level of health care–related OOPC, particularly for those whose members have a chronic or complex medical condition (Newacheck, Inkelas, and Kim 2004; Kuhlthau et al. 2005; Newacheck and Kim 2005; Houtrow, Kim, and Newacheck 2008; Witt et al. 2011). Evidence from the RAND Health Insurance Experience and other studies of the effects of cost-sharing on health care use suggest that increased cost-sharing and OOPC are associated with decreased health care utilization (Newhouse et al. 1981; Keeler and Rolph 1983; Shapiro, Ware, and Sherbourne 1986; Manning et al. 1987). However, these studies are not able to identify the point at which high OOPC becomes “burdensome.” Family financial burden has been conceptually defined as the family's perception of financial stress and worry caused by inadequate monetary resources to meet the family's fiscal demands (McCubbin, Sussman, and Patterson 1983; Kahn and Pearlin 2006); while health care-related financial burden can also be exemplified by delaying or forgoing needed health care because of cost (Wisk and Witt 2012). As problems paying medical bills and medical debt have been associated with unmet health care need (May and Cunningham 2004; Doty, Edwards, and Holmgren 2005; Collins et al. 2008; Cunningham and Felland 2008; Herman, Rissi, and Walsh 2011; Robertson and Collins 2011), there is a need for an objective measure of financial burden that can predict unmet health care need due to cost. However, there is a paucity of evidence regarding how unmet need (resulting from the subjective perception of burden) and objective measures of financial burden correlate, and if the relationship between subjective perception and OOPC is moderated by other factors, such as family income. Most frequently, financial burden is objectively characterized as the percentage of income spent on OOPC, with cut-points of 5 or 10 percent applied to signify financial burden versus “normal” costs (Galbraith et al. 2005; Kuhlthau et al. 2005; Banthin and Bernard 2006; Banthin, Cunningham, and Bernard 2008; Houtrow, Kim, and Newacheck 2008). The 10 percent cut-point originally came about nearly 30 years ago in defining the term “underinsurance” (Farley 1985), but it may no longer be relevant in light of more recent evidence that points to substantially higher OOPC relative to family income for many U.S. families (Yu, Dick, and Szilagyi 2008). Furthermore, the relevance of any cut-point is likely different across levels of family income, as the percentage of income spent on OOPC is greater for lower income families (Galbraith et al. 2005).