Burden of out-of-pocket health expenditure and its impoverishment impact in India: evidence from National Sample Survey

ABSTRACT

In low- and middle-income countries like India, financing of health-care expenditure is predominantly characterized by out-of-pocket (OOP) spending. Given this context, the current study examined the economic burden of OOP health expenditure and resultant impoverishment in India. The study employed nationally representative survey on ‘Health and Morbidity’ conducted by National Sample Survey Organization (NSSO) in 2014 in India. Standard catastrophic, inequality and impoverishment measures were used to analyse the burden and impact of OOP health expenditure. Findings revealed that although the overall incidence and intensity of OOP health expenditure was concentrated among the richer consumption groups, in-depth study of the same in terms of inpatient and outpatient care showed that the incidence of outpatient care was highly concentrated towards the poorer consumption groups. Study also revealed that around 8% of the population fell below the poverty line due to OOP health expenditure in which outpatient care was the main contributing factor (5.8%). Among different socio-economic covariates, rural population, Muslims, Scheduled Castes and casual/agriculture labour were most affected and had higher impoverishment impact. Our findings suggest that there is a need to revisit the approach towards health-care financing in India.

Abbreviations: OOP: Out-of-pocket; MPCE: Monthly per capita consumption expenditure; SCs: Scheduled Castes; STs: Scheduled Tribes; OBCs: Other Backward Castes; TCE: Total consumption expenditure; PFHI: Publicly financed health insurance; RSBY: Rashtriya Swasthya Bima Yojana; CMCHIS: Chief Minister’s Comprehensive Health Insurance Scheme; UHC: Universal health coverage

KEYWORDS:

• Out-of-pocket
• catastrophic
• impoverishment
• inequality
• incidence
• intensity

Disclosure statement

No potential conflict of interest was reported by the authors.

Data availability statement

This paper is based on anonymized survey data collected by the National Sample Survey Organization (NSSO), a department of the Ministry of Statistics and Programme Implementation, Government of India. Data are available in the public domain. The data are already available in publicly available repositories to individuals both at national and international level through http://www.mospi.gov.in/.

Notes

1. In NSSO health rounds, data are collected ailment-wise which consists of a broader set of questions pertaining to OOP health expenditure.

2. Rural-urban disparities are important to study as around 70% of the population in India resides in rural areas.

3. India is a multi-religion country where around 80% of the population follow Hinduism, 14.2% adheres to Islam and remaining 6% follow other religions.

4. The Constitution of India has classified the indigenous population into STs, SCs and OBCs and accorded them special protection. STs and SCs are regarded as socially disadvantaged groups and OBCs are the backward classes.

5. Household size consists of the number of family members in the household.

6. A family of maximum five members covered under the scheme was entitled to receive a sum of INR 30,000 (equivalent to $500).

7. RSBY was subsumed into this scheme.

Additional information

Funding

This research received no grant from any funding agency in the public, commercial or not-for-profit sectors.

Notes on contributors

Shivendra Sangar

Shivendra Sangar is a PhD. scholar in the school of humanities and social sciences at Indian Institute of Technology Mandi. He has done is masters in economics. Shivendra’s research interests include health economics, health care financing, health care utilisation and health inequalities.

Varun Dutt

Dr. Varun Dutt is assistant professor in the school of humanities and social sciences at Indian Institute of Technology Mandi. Dr. Dutt has applied his knowledge and skills in the fields of psychology, public policy, and computer science to explore how humans make decisions on social, managerial, and environmental issues. His research interests include artificial intelligence and cognitive modelling, environmental decision making and health economics.

Ramna Thakur

Dr. Ramna Thakur is assistant professor in the school of humanities and social sciences at Indian Institute of Technology Mandi. Dr. Thakur has done her PhD. in development economics. Her research interests include health economics, health care financing, health inequalities and energy economics.