Table 1 Overview of the two main approaches used to measure catastrophic health expenditure

Definition

Catastrophic health expenditure is defined as occurring when out-of-pocket payments exceed a defined proportion of a household’s total income or expenditure

Catastrophic health expenditure is defined as occurring when out-of-pocket payments exceed a defined proportion of a household’s capacity to pay (the available household expenditure remaining after their basic needs have been met)

Calculation

\(\frac{Out\,of \,pocket\,payments}{Total expenditure\,or \,income}>Threshold\)

\(\frac{Out\,of\,pocket\,payments}{Total\,expenditure-basic\,needs}>Threshold\)

Numerator

Out-of-pocket payments

Out-of-pocket payments

Denominator

Total household expenditure or total household income

Sub-method 1: Total household expenditure minus actual food spending

Sub-method 2: Total household expenditure minus a standard amount representing subsistence food spending^a

Sub-method 3: Total household expenditure minus a standard amount representing subsistence spending on food, rent and utilities

Standard thresholds

10% and 25%

25% and 40%

40%

40%

Examples of application

Sustainable Development Goal (indicator 3.8.2), World Bank

Pan American Health Organization, World Bank

World Health Organization

World Health Organization—European Region

Representative papers

Wagstaff and Doorslaer [13], Wagstaff [12]

Xu et al. [14, 15],