|Year : 2018 | Volume
| Issue : 4 | Page : 308-310
Sources of finance for hospitalized treatment in India: Evidence for policy
Mukesh1, Mohita Gupta2, Sarvesh Singh3
1 Joint Director, National Sample Survey Office(Coordination and Publication Division), Ministry of Statistics and Programme Implementation, Government of India, New Delhi, India
2 Monitoring and Evaluation Consultant, Grant Thornton India LLP, Mumbai, India
3 Vice President and APAC Head of Data Management at ICON, Chennai, Tamil Nadu, India
|Date of Web Publication||11-Dec-2018|
F-517, PragatiVihar Hostel, Near CGO Complex, Lodi Road, New Delhi - 110 003
Source of Support: None, Conflict of Interest: None
| Abstract|| |
A study of sources of finance which the household resorts to, in order to meet the hospitalization expense can be of use to policy makers who may want to work in the direction of providing financial security against hospitalization expenses to the masses. In this view, an attempt has been made to study the sources of finance for hospitalized treatment at an individual level based on criteria such as level of living, socio-economic background, level of care in India, as well as at state level through unit level data of the survey on “Social Consumption related to Health”, conducted by National Sample Survey (NSS) during January, 2014 to June, 2014. It has been found that the household's income or saving is not sufficient to meet the expenditure for hospitalized treatment and people have to borrow or arrange finance by other means for hospitalized treatment across the country. The results thereby suggest inputs to policy makers and re-establish the necessity of appropriate policy in order to provide financial security against escalating medical expenses.
Keywords: Finance, hospitalization, national sample survey office, rural, treatment, urban
|How to cite this article:|
Mukesh, Gupta M, Singh S. Sources of finance for hospitalized treatment in India: Evidence for policy. Indian J Public Health 2018;62:308-10
|How to cite this URL:|
Mukesh, Gupta M, Singh S. Sources of finance for hospitalized treatment in India: Evidence for policy. Indian J Public Health [serial online] 2018 [cited 2019 May 19];62:308-10. Available from: http://www.ijph.in/text.asp?2018/62/4/308/247222
| Introduction|| |
In recent years, Government of India has undertaken several steps to improve the health-care system with the objective of making health-care affordable and accessible to all its citizens. Despite the efforts, India's health-care system continues to remain inundated with a number of inherent weaknesses that are specifically related to policy and governance. This inadequacy has resulted in an unwarranted burden on the pocket of the common man with respect to rising hospitalization expenses.
The National Sample Survey Office (NSSO) Social Consumption: Health Survey conducted from January 2014 to June 2014, in its 71st round, and released on June 30, 2015, reveals that 86% of the rural population and 82% of the urban population in India were not covered under any scheme for health expenditure support. The proportion of ailing persons in total population was reported to be 8.9% in rural areas and 11.8% in urban areas.
It has been found that the household's income or saving is not sufficient to meet the expenditure for hospitalized treatment and people have to borrow or arrange finance by other means for hospitalized treatment across the country. About 66% of households in the bottom quintile of monthly per capita expenditure met medical expenses from their own savings, 5% arranged the same from friends/relatives, 28% borrowed or sold their assets, and <1% relied on other sources, including protection schemes.
This inadequacy has resulted in an unwarranted burden on the pocket of the common man with respect to rising hospitalization expenses. In this view, an attempt has been made to study the sources of finance for hospitalized treatment at an individual level based on criteria such as level of living, socioeconomic background, and level of care in India. The same is also attempted at state level through unit level data of the survey on “Social Consumption related to Health,” conducted by National Sample Survey (NSS) from January 2014 to June 2014.
| The Present Health-Care Scenario|| |
Making health-care affordable and accessible for all its citizens is one of the key focus areas of the country today. India lacks a strong public health-care system, and this leads to dominance of private sector in the health-care delivery market of India. Further, most of the organized private health-care system is confined to state capitals or big cities and the rural area continues to be deprived of basic facilities related to health. Inadequate protections against financial stocks that are associated with the costs of medical treatment have pushed many Indian households into poverty.
The central government introduced the National Health Mission Program (Rural and Urban) with a vision to improve health-care facility in rural and urban areas and invested significantly to improve the infrastructure and delivery mechanism jointly with the state governments for the poor with a focus on slum dwellers and other vulnerable groups. A key drawback of the scheme includes inadequate provision of secondary and tertiary level care, which limits the scope of the program to provide adequate curative and rehabilitative health services.
The Rashtriya Swasthya Bima Yojana was launched in 2008 to address this concern. The scheme provides eligible BPL households coverage of Rs 30,000 for most diseases that require hospitalization. While the scheme initially only covered unorganized sector workers and their families below the poverty line, it has gradually been expanded to cover more categories of unorganized workers. Around 33 million families (or 120 million people) are covered under Rashtriya Swasthya Bima Yojana (RSBY) and 4.3 million people have used hospitalization services of RSBY, according to the 12th 5-year plan document (2014). However, the scheme does not cover outpatient care which constitutes a significant portion of out-of-pocket expenses incurred by households. Moreover, the scheme covers 5 days of hospitalization with a coverage limit of Rs 30,000; hence, those with chronic conditions would still face huge out-of-pocket expenses. On January 1, 2015, two other schemes, namely, Aam Aadmi Bima Yojana and Indira Gandhi National Old Age Pension Scheme, were aligned with RSBY to provide facilities under different schemes through a single smart card.
Despite these efforts, the health-care system in India is yet marked with significant disparities between urban and rural areas within a state, as well as between states.
The survey on Social Consumption: Health conducted by NSS office during the period January 2014 to June 2014 aimed at generating basic quantitative information on the health sector. One of the vital components of the survey was the collection of relevant information for determining the prevalence rate of different diseases among various age–sex groups in different regions of the country. The ailments for which such medical care was sought, and the extent of use of Government hospitals as well as different levels of public healthcare institutions and the expenditure incurred on treatment received from public and private sectors were explored during the survey.
| Objective of the Paper|| |
The objective of this paper is to study the sources of finance for hospitalized treatment in India based on unit level data of the survey on “Social Consumption related to Health” conducted by NSS during January 2014 to June 2014. The results thereby suggest inputs to policymakers to reestablish the necessity of appropriate policy interventions to provide financial security against escalating medical expenses.
| Methodology|| |
The NSSO survey covered the whole of the Indian Union, and the period of survey was of 6 months. For the rural sector, the list of 2011 census villages constituted the sampling frame. However, wherever 2011 census list was not available, the 2001 census villages were updated by excluding the villages urbanized and including the towns deurbanized after 2001. For the urban sector, the latest updated list of UFS blocks (phase 2007–2012) was considered as the sampling frame.
A total of 8297 FSUs were surveyed at an all-India level. The total number of households surveyed was 65,932, and the total number of persons surveyed was 3, 33,104 at an all-India level.
| Findings|| |
The findings of the paper based on the NSSO survey (71st Round) have been discussed in four subsections. In the first subsection, sources of finance for hospitalized treatment for different quintile classes of level of living have been studied separately for both rural and urban areas. The second subsection presents the same according to level of care and illness due to chronic disease. In the next two subsections, the above have been discussed according to socioeconomic background of households at national level and at state level for both rural and urban areas.
Among all the indicators, what is starkly evident is the fact that both urban and rural households rely mostly on their household income and savings to meet their medical expenditure. While 72% of rural households rely on 'income/savings' and 22% prefer “borrowings”, in the case of urban households, 77% relied on their “income/saving” (77%) and only 17% rely on “borrowings” (only 17%) for financing expenditure on hospitalization.
Further, in rural India, 80.30% are dependent on household's income or savings and 15.20% resort to borrowings for treatment in public hospital. Only 64.30% are able to afford treatment at a private hospital whose medical expenses are met with from household's income or saving, whereas 28.30% have to borrow in rural India. The contribution from friends and relatives as a source of finance is more than double in case of private treatment as compared to treatment in a government hospital. With respect to urban India, there is not too wide a gap in expenditure incurred on treatments from a public or a private hospital.
Socioeconomic background plays a pivotal role in accessing healthcare as the family's social group, religion, size, and occupation as indicators for analyzing (any) relation between the family's socioeconomic status and its medical expenditure reveal interesting findings. Family size has a positive association with the kind of sources of finance, in the sense that as family size increases, dependency on household's income or saving as a source of finance to meet the hospitalized expenditure also increases in both rural and urban India. On the other hand, it may be observed that borrowing is high for small families and decreases as family size increases in both rural and urban India. A similar trend can be noticed for contribution from friends and relatives and sale of physical assets. However, families with regular salary and those that are self-employed also borrow significantly to meet the expenditure for hospitalized treatment in both rural and urban India.
At the state level, household's income or saving for hospitalized treatment is more than 90% in four states (Jammu and Kashmir, Delhi, Uttaranchal, and Assam) and more than 80% in 10 states in rural India. Borrowing as a source of finance to meet the hospitalized expenditure is more than 20% among all the southern states, Odisha, West Bengal, and Bihar. Sale of physical assets to meet the hospitalized expenditure is only visible in the state of Odisha, Jharkhand, and West Bengal in rural India. Similar pattern with a little variation is found in urban India.
| Conclusion|| |
Within the different categories of sources of finance, the highest proportion of source of finance to meet the hospitalized treatment is met from household's income or saving followed by borrowing.
Apart from this, significant rural–urban differences have been found in different categories of sources of finance, irrespective of the background of the family. Although infrastructure in urban India fares better than that found in rural areas, it is still largely dependent on the level of living of the family. The percentage distribution of sources of finance for hospitalized treatment captures only a part of the picture and does not fully describe the complexity of issues. It is also important to measure other socioeconomic aspects and issues related to governance and policy which capture the multi-dimensional nature of health financing in India.
Policymakers must, therefore, strive for inclusiveness in their policies through adoption of homegrown and innovative solutions in financing health-care in India and look at best practices that have worked successfully in other countries. Efforts must begin in a certain direction so that within a decade a comprehensive, all-inclusive, equitable policy on health is provided to every Indian citizen for all types of health services – promotion, prevention, treatment, and rehabilitation – without incurring financial hardship.
Financial support and sponsorship
Conflicts of interest
There are no conflicts of interest.
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