A recent study reveals that 65.6 percent of healthcare expenditure in India is out of pocket — paid for by the patients themselves. The study, conducted by the Institute for Health Metrics and Evaluation, University of Washington, was conducted based on evidence of healthcare expenditure in 2014.
At 65.6 percent, India is placed sixth highest in terms of patient expenditure out of 25 countries that all have values above 50 percent. Sudan leads the poll, at 76.6 percent, followed by Yemen, Azerbaijan, Nigeria, and Cameroon.
Dr Anita Kar Director of School of Health Sciences at Pune University comments on the study “India is known to have one of the highest out-of-pocket expenditures on health globally”. Dr Kar attributes this to an overwhelming reliance on private healthcare, which she attributes to historical factors.
Following the independence of India, says Dr Kar, the country suffered high rates of mortality and morbidity related to disease. This led to the government bringing in, and relying upon, private medical practitioners to provide healthcare until a time when the government could step in to provide universal healthcare.
As can now be seen in India’s medical system, the private healthcare sector has flourished. Current estimates put 80 percent of outpatient care, and 60 percent of inpatient care in the hands of the private sector. It is believed that out of pocket expenditure for services by private hospitals places 55 million Indians into poverty each year.
This situation was acknowledged by the Indian government in its recent healthcare bill. The strategy to resolve India’s reputation for out of pocket expenditure involves the “strategic purchasing” of care from private hospitals and clinics by the Indian government. This would be funded by the intended increase of public healthcare expenditure to 2.5 percent of GDP, compared to the current 1.5 percent.
A study by the Lancet discusses the potential future healthcare spending by governments. The study finds that typically as a country’s GDP grows, the levels of spending on healthcare increases proportionately. The study does however acknowledge that this trend of a gradual increase is varied, with some countries increasing faster than others.
India for example, is estimated by the study to increase its overall health expenditure to 5.6 percent of GDP. This value is far lower than many nations government spending on GDP, even at today’s levels of spending. This would imply that if other countries follow the same trends, India would be drastically behind in terms of healthcare spending by 2040. Extrapolating this in terms of the prevalence of private healthcare, it is likely that without major increases in funding, out of pocket expenditure will continue to be a problem in India for many years.