Rising medical costs pinching Indian pockets

There is no respite in India’s woes when it comes to healthcare. While the common man faces acute shortage of hospital beds and doctors, the rising medical expenses haven’t helped their cause. According to a report by the National Sample Survey Office (NSSO), consumer expenditure on healthcare is ever increasing both in urban and rural India post 2004-05.

While the consumer expenditure on healthcare in rural India increased from 6.6% in 2004-05 to 6.9 per cent in 2011-2012, urban Indians’ expenditure on medical care increased from 5.2% in 2004-05 to 5.5% in 2011-2012. Medical expenses fall under the miscellaneous goods and services category in the NSSO report.

The survey shows that miscellaneous goods and services constitute 26.1% of consumer expenditure in rural India while it stands 39.7 per cent for urban India in 2011-12. Apart from medical care, the miscellaneous goods and services category  also includes expenses on education, entertainment, toilet articles, other household consumables, consumer services excluding conveyance, conveyance, minor durable-type goods, rent, taxes and cesses.  

NSSO report also reveals that expenditure on healthcare is highest in rural India and fifth highest in urban India during 2011-2012 in miscellaneous goods and services category.

Experts suggest that access to affordable and quality health care is still a dream for most rural Indians. Government hospitals can hardly fill the gap and therefore, most rural Indians are left with no choice but to rely on costly private hospitals.  

Sunil Sinha, head of economic research and chief economist at rating agency Crisil concurs, “Out of all other miscellaneous expenses the expenditure share on medical care is higher in rural India because rural India lacks affordable medical options and in that case the only available options are costly private hospitals.” Not just NSSO but, the issue of inflating consumer expenditure on health care has also been raised by the World Health Organisation (WHO).

According to WHO , “70% Indians are spending their out-of-pocket income on medicines and healthcare services in comparison to 30-40% in other Asian countries like Sri Lanka, and are still suffering from infected diseases due to lack of best quality drugs and healthcare facilities.”

Out of pocket expenditure is any direct outlay by households, including gratuities and in-kind payments, to health practitioners and suppliers of pharmaceuticals, therapeutic appliances, and other goods and services whose primary intent is to contribute to the restoration or enhancement of the health status of individuals or population groups. It is a part of private health expenditure.

Voicing concern over the impoverishing impact of health and medical expenses on the vulnerable sections of the society, President Pranab Mukherjee while addressing 40th convocation function of All India Institute of Medical Sciences (AIIMS) in New Delhi said, “It was unacceptable that almost 80% of the expenditure on healthcare by people was met by personal, out of pocket, payment. I am shocked to note that as many as 4 crore people of our country plunge into poverty each year due to expenses on medical treatment.”