Out of pocket health spending has risen in rural India: study

Even after adjusting inflation, spending has increased 25 per cent in six years

 
By Sonal Matharu
Last Updated: Saturday 04 July 2015

Government schemes to provide health care and health insurance cover to the poor seem to have been of little help if one were to go by the findings of a recent health study. The out of pocket expenditure of households in rural India has shot up, says the study conducted by Prayas, a non-profit from Chittorgarh in Rajasthan, along with Oxfam India.

The study, designed on the pattern of the National Sample Survey Organisation (NSSO), covered rural areas of six states—Assam, Jharkhand, Rajasthan, Tamil Nadu, Uttarakhand and Bihar. Data for Bihar has not been included in the study yet due to a technical glitch.

Major findings
  • Average medical expenditure for non-hospitalised treatment per person has shot up to Rs 832 per fortnight. The average of the same states in 2004 was Rs 322 as per the NSSO 60th round findings
  • Similarly, for hospitalised treatment, a person spent Rs 13,459 on an average in 2011 as compared to Rs 6,234 in 2004
  • The study also shows an increase in health care seeking trend amongst rural Indians. In 2004, 64 per cent people reported morbidity as compared to 70 per cent in 2011
  • 52 per cent people now prefer private health care service providers as compared to 49 per cent in 2004
  • Households with monthly per capita expenditure (MPCE) of less than Rs 500, spend an average Rs 407 on non-hospitalised treatment. Those with MPCE of more than Rs 2,000 spend Rs 1,494 on the same
 
In the five states studied, the average medical expenditure for non-hospitalised treatment per person has shot up to Rs 832 per fortnight. The average of the same states in 2004 was Rs 322 as per the NSSO 60th round findings. This indicates that if a person is seeking out patient treatment, he or she spent Rs 500 more from the household income. Similarly, for hospitalised treatment, a person spent Rs 13,459 on an average in 2011 as compared to Rs 6,234 in 2004.

“The overall cost of treatment has increased many times because of cost of medicines, diagnostics and other investigations. Even after adjusting for inflation, the households are spending 21 to 25 per cent more on health care from their pocket,” says Narendra Gupta, secretary of Prayas.

Poor reflection on government welfare schemes

The increase in spending is despite government health welfare programmes. In 2005, the Union health ministry launched its flagship National Rural Health Mission (NRHM) to improve access to quality health care. The Rashtriya Swasthaya Bima Yojna (RSBY) is another Union government scheme for health insurance. Several states are simultaneously running their health care schemes. Assam is providing health care through its Assam Public Health Act, Gujarat has Chiranjeevi Health Scheme, Karnataka ensures coverage of health care expenditure through its Arogyashree and Yeshaswani schemes and Rajasthan gives health insurance benefit under Mukhya Mantri Jeevan Raksha Kosh (MMJRK).

“The purpose of the study was to assess whether these schemes  have had any impact on the out of pocket expenditure between 2005 and 2010. These government schemes are running for six years now,” says Gupta.

Many other studies show that out of pocket spending on health care is one of the major reasons for pushing households into poverty. In the World Health Survey of 2011, India was ranked 42nd in the list of countries with highest average of out of pocket expenditure. The survey found 74.4 per cent of private expenditure on health was paid out of pocket.

“If a household spends more than 10 per cent of household expenditure on health care, then it is termed catastrophic expenditure. In India, 13.68 per cent of household expenditure is spent on health care,” says Sakthivel Selvaraj, health economist with the Public Health Foundation of India.

The study was conducted from March to May 2011, covering 2,723 households. It also shows an increase in health care seeking trend amongst rural Indians. In 2004, 64 per cent people reported morbidity as compared to 70 per cent people in 2011. However, 52 per cent people now prefer private health care service providers as compared to 49 per cent in 2004.

“The majority of the people do not access health care from qualified people in India. The study has found that there is an increase in reported morbidity. That means more people are now at least approaching doctors. This is still low as an average Indian’s visit to a doctor is three times a year as compared to an American who visits a health care facility 10 times a year,” explains Gupta.

The average total expenditure on non-hospitalised treatment  increased with increase in incomes. Households with monthly per capita expenditure (MPCE) of less than Rs 500, spend an average Rs 407 on non-hospitalised treatment. Those with MPCE of more than Rs 2,000 spend Rs 1,494 on the same.

“India spends 4.2 per cent of its Gross Domestic Product (GDP) on health care. Out of this, the government is only spending one-fifth, rest 70 per cent is being spent by the households. Two-third of health care expenditure is on out-patient and the rest one-third is on hospitalisation,” says Selvaraj.

Out of pocket expenditure reduces if the government spends more on providing public health care, he adds. At present India spends only 1.2 per cent of its budget on health care that is expected to rise to 2.5 per cent by the 12th Five-Year Plan and to three per cent by the next Five Year Plan.

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