The impoverishing effect of healthcare payments in India: new methodology and findings.

Abstract

High private healthcare spending as well as high out of pocket spending in India are placing a considerable financial burden on households. The 60th national morbidity and healthcare survey of the National Sample Survey Organisation provides an opportunity to examine the impoverishing effect of healthcare spending in India. This paper presents an analysis of the nsso survey data with some new approaches to correcting some of the biases in previous assessments of the ”impoverishing” effect of health spending. Despite these corrections, the results suggest that the extent of impoverishment due to healthcare payments is higher than previously reported. Furthermore, outpatient care is more impoverishing than inpatient care in urban and rural areas alike. The analysis of the extent of impoverishment across states, regions (urban and rural areas), income quintile groups, and between outpatient care and inpatient care yields some interesting results. I n India, not only is the private healthcare spending much higher than government spending in comparison to what is observed in many developing countries, but also within the private health spending, the share of out-of-pocket (OOP) health spending in India is much higher (Table 1, p 66). The share of OOP in total expenditure on health is the highest in India in comparison to the selected developing countries, except Pakistan. The high share of private healthcare spending, which is mainly OOP spending, reflects on considerable financial burden on households. Indeed, the healthcare costs are believed to be one of the important causes of impoverishment in India – a country that is home to the largest number of the world’s poor. 1