Title: Household Out-of-Pocket Expenditure, Morbidity, and Private Health Insurance, in the Australian Health Care System   

Speaker: PhD Candidate Tim Ludlow, School of Economics (UQ)

Time and date: 11am-12pm, Monday 12 April 2021

Location: Room 14-522 Sir Llew Executive Boardroom

About the seminar

The increasing prevalence of chronic conditions that accompanies ageing populations are associated with higher health care expenditures, requiring to be financed by either public or private sources. OECD countries rely on out-of-pocket expenditure (OOPE) to finance an average of 20% of all health care expenditures, potentially imposing significant burdens on some household budgets. This is especially a concern for households with chronic conditions, a well-documented predictor of high OOPE. Theoretically, households could mitigate OOPE risk by purchasing private health insurance (PHI).

The purpose of this research is to investigate if PHI mitigates the exposure to OOPE risk for households in the Australian health care system. Using longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, we make predictions based on PHI status, and differing levels of morbidity. Our results show that OOPE share is consistently higher for PHI households, across each level of morbidity, after controlling for health status and other confounders. We also find as morbidity increases, the OOPE share gap between PHI and non-PHI households increases. Therefore, the greater the morbidity, the less PHI households are protected from high OOPE. Additionally, when hospitalisation occurs, we find some evidence of discretionary spending for PHI households with high total expenditure. Our research highlights that PHI in Australia is not very successful at mitigating OOPE risk, especially for higher morbidity households.

About the presenter

Tim is currently a PhD student at The University of Queensland, through The School of Economics. His current thesis is on empirical studies in the field of applied health economics, focusing on the areas of household health care expenditure, the effects of housing on mental health, and peer effects on cancer screening.


Sir Llew Edwards Building (14)
14-522, Executive Boardroom