OBJECTIVES :

India is home to the largest number of poor people in the world. Out of the 1.324 billion people in India (2016), around 12.4% of the population is below the poverty line. In India, OOP expenses accounts for about 62.6% of total health expenditure - one of the highest in the world. High OOP health expenditures affect the household economy and push many households into poverty. This study aims to identify the impoverishing effects of OOP health expenditures in India. This analysis is useful for establishing policies and programs for poverty alleviation specifically to create financial risk protection mechanisms for health expenditures in India.

METHODS

Data from the National Sample Survey Organization, Social Consumption in Health 2014 is used to investigate the effect of OOP health expenditure on household poverty. Poverty headcounts and poverty gaps were estimated at the household level before and after making OOP healthcare payments. A logistic regression model is for predicting the effect of various factors on the incidence of impoverishment due to OOP health expenditures.

RESULTS

There were 65,932 households in the sample. The total poverty headcount before making OOP payments was 16.44% and it increased to 19.05% after making OOP payments. The normalized poverty gap increased from 19.13% to 22.69% after making OOP health care payments. Logistic regression results showed that small households, household members with increased duration of stay in the hospital, utilization of private health facility and the presence of chronic illness increased odds of impoverishment due to OOP health expenditures.

CONCLUSIONS

Health insurance programs must be expanded to cover outpatient and preventive health services, include people above the poverty line, cover the whole household irrespective of the number of members living in the household and the coverage threshold limits must be increased. Urban poor must be enrolled in health insurance programs without any delay.