Assessing Inequity, Catastrophe and Impoverishment in Healthcare Expenditure in India

Abstract

Health care financing needs to tradeoff between efficiency and equity, so that it can protect the households from the Out of Pocket Expenditure (OOPE) and potential impoverishment. OOPE are the principal source of health care financing in majority of low and middle-income countries including India. However, limited studies have examined the equity, redistribution, and progressivity aspects of health care financing in India. Present study assesses the inequities, catastrophe and impoverishment due to healthcare payments in India. The study uses data from three rounds of Consumer Expenditure Surveys (i.e. 50th (1993-94), 61st (2004-05), and 68th, (2011-12) round) conducted by National Sample Survey Organization (NSSO). Present study also taken into account recent health utilization survey i.e. 71st round, 2014. Present study uses various statistical models such as logistic regression, generalized linear model, two-part model, and Kakwani’s index of progressivity. Present work also draws its insights from the economic theories such as Andersen’s behavioural model of healthcare utilization, Grossman’s model of demand for health capital and Sen’s capability approach. Results indicate towards significant increase in OOPE since 1993-94. The expenses on medicines and other diagnostics such as x-rays, laboratory tests were accounting for more than 60% of health care expenditure for both inpatient and outpatient. Higher economic status, age composition of the households comprising of the elderly members and children, and rural residence were the significant predictors of Catastrophic Health Expenditure (CHE) and OOPE. The incurrence of CHE has increased from 12% in 1993-94 to 17% in 2011-12 at 10% threshold level. The higher level of CHE and OOPE results into impoverishment and poverty. Present thesis also highlights on the current aspect of disease driven healthcare expenditure in India in the presence of increasing burden of Non-communicable diseases (NCDs) along with the emerging burden of other diseases. Reducing OOPE and financial catastrophe through insurance coverage is a major challenge in India as less than 20% of the population is covered via any insurance scheme. Results indicate towards the progressivity in health care financing in India. The findings of the study could help the planners and policy makers to address the equity perspective of health care financing, which can safeguard poor from making unjust payments for health care in India.