The Effect of Mid-to-Long-Term Hospitalization on the Catastrophic Health Expenditure: Focusing on the Mediating Effect of Earned Income Loss

Background: Mid-to-long-term hospitalization (MLTH) can threaten the household economy with high medical costs and loss of income. Therefore, it could increase the catastrophic health expenditure (CHE), measured as the ratio of medical expenses to the ability to pay. This study aimed to determine the effect of MLTH on the incidence of CHE and the mediating effect of earned income reduction rate (EIRR). Methods: We used 2015 to 2017 data from the Korean Welfare Panel Study and selected households with earned income through work. The final samples were 1671 households in the database. This study applied three-step regression analyses for estimating mediation effects. Results: First, MLTH affected CHE increases; second, MLTH increased EIRR; third, both EIRR and MLTH increased CHE at the same time. Additionally, the bootstrapping results were 0.364 to 0.644 in the 95% confidence interval, which suggested that EIRR mediated the effects of MLTH on CHE. Conclusions: Previous studies have only focused on medical costs when interpreting CHE; however, it is also essential to recognize that the MLTH can have a negative effect on the EIRR. This study contributed to the literature by giving another insight into interpreting the cause of CHE, focusing on income loss factors.