Thursday, January 13, 2011

Indians pay 78% of medical expenses from their own pocket Read more: Indians pay 78% of medical expenses from their own pocket

Most of the medical expenses incurred by an average Indian are paid from their own pocket.

According to an analysis published in the medical journal `Lancet', private expenditure on health in India is close to 78% compared to 14% in the Maldives, 29% in Bhutan, 53% in Sri Lanka, 31% in Thailand and 61% in China.

Only Pakistan is worse off with private expenditure being as high as 82.5%. The paper, "Financing health care for all: challenges and opportunities", says two features of the private out-of-pocket expenditure in India are noteworthy.

First, most of the expenditure (74%) was incurred for outpatient treatment, and not for hospital care. Only 26% was for inpatient treatment. Secondly, purchasing drugs accounted for 72% of the total private out-of-pocket expenditure.

According to Dr A K Shiva Kumar, one of the primary authors of the paper, nearly 39 million people in India are pushed to poverty because of ill health every year. Around 30% in rural India actually didn't go for any treatment for pure financial reasons in 2004, up from 15% in 1995. Similarly, in urban areas, 20% of ailments were untreated for financial reasons in 2004, up from 10% in 1995. Shockingly, 47% of hospital admissions in rural India and 31% in urban India were financed by loans and the sale of assets.

Dr Kumar, who is part of Prime Minister Manmohan Singh's high level expert group on universal health coverage, told TOI, "The health sector at present is a rip off for the common man. The future has to be tax funded. Preventive, primary and some part of secondary treatment has to be completely free, cashless and provided by the government and funded through taxes."

Medical insurance too has a meager market share. According to the National Commission for Enterprises in the Unorganised Sector, only 7% of India's workforce is in the organised sector. The remaining 93% are cultivators, agricultural labourers, artisans and workers who typically do not have a regular or assured source of income.

Analysis of the per person public spending on health has also thrown up bleak results. While the government spent just 19 purchasing power parity (PPP) dollars on every person for health, the figure stood at 207 in Thailand, 122 in China, 88 in Sri Lanka, 751 in Maldives and 60 in Bhutan. "The per person government spending on health in India was about 22% of that in Sri Lanka, 16% of that in China and less than 10% of that in Thailand," the paper says.

Public spending on health -- 0.94% of the gross domestic product (GDP) -- is among the lowest in the world.

Between 1986 and 2004, the average real expenditure per hospital admission increased three times in government and private hospitals. The sharp increase in the prices of drugs has been the main reason for the rising costs of medical care, which more than tripled between 1993-94 and 2006-07, says the paper.

Dr Kumar added, "Between 1993-94 and 2004-05, compared with a 67% increase in real per person income and an 82% increase in per person tax collections, real per person public health expenditure rose from Rs 84 to Rs 125 -- an increase of 48%."

Source: Times of India

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