The association between health literacy and out-of-pocket health expenditure: exploring heterogeneity by chronic disease in Zhejiang, China

BACKGROUND: Health literacy has been increasingly emphasized as a critical factor shaping healthcare behaviors and costs. However, empirical evidence on its association with out-of-pocket (OOP) health expenditure remains complex, and little is known about how this relationship varies by chronic disease status. This study aimed to identify distinct health literacy profiles within a large Chinese population, examine their associations with OOP expenditure, and explore how these associations vary by chronic disease status. METHODS: A cross-sectional study was conducted using data from a large-scale health literacy survey of 56,863 residents aged 15-69 in Zhejiang, China. Latent profile analysis (LPA) identified health literacy subgroups using the validated Chinese Health Literacy Scale. A Two-Part Model was employed to decompose expenditure into the probability of incurring costs and expenditure intensity. Stratified analyses were conducted to examine variation across chronic disease status. RESULTS: LPA identified three health literacy profiles with weighted proportions of: Relatively High (61.45%), Moderate (26.54%), and Low (12.01%). The analysis revealed an inverted U-shaped trajectory. The Moderate group exhibited significantly higher total OOP expenditure than the Low group (AME = 554.71 CNY, P < 0.05), driven primarily by elevated expenditure intensity. Conversely, the Relatively High group showed no significant difference (P > 0.05), indicating expenditure levels comparable to the baseline. Interaction analysis suggested potential heterogeneity by chronic disease status (P for interaction = 0.053, in Part 2), which prompted exploratory stratified analyses. Among those with one chronic disease, the Relatively High group showed higher probability of incurring expenditure (Part 1, P < 0.01) but significantly lower expenditure intensity (Part 2, P < 0.05). However, this association was not statistically significant among those with multimorbidity. CONCLUSIONS: The findings indicate that health literacy is associated with expenditure in a non-linear pattern. While higher literacy maintains expenditure at baseline levels, exploratory analyses suggest this protective effect may be attenuated under high disease burden. To enhance both equity and efficiency, policy strategies should focus on cultivating decision-making capabilities for appropriate healthcare utilization among general populations and strengthening financial protection for those with complex needs.