Skip to main content
SpringerLink
Log in

Health Insurance as a Tool for Selecting Private Hospitalization and Mitigating Financial Burden in India: An Analysis of National Sample Survey Data

  • Published:
Global Social Welfare Aims and scope Submit manuscript

Abstract

This study aims to investigate the association between having health insurance and the choice of hospitalization (public or private) and examine the crucial factors influencing this decision. Furthermore, this study also explores the role of health insurance in mitigating the economic burden. This study uses nationally representative data (India) on morbidity and health care from the 75th (2017–2018) round of the National Sample Survey. Descriptive statistics, tobit regression, and logistic regression analysis are performed. The results indicate that out-of-pocket expenditure (OOPE) is generally higher among individuals who receive treatment at private hospitals (₹29,896), are aged 80 years or above (₹27,993), belong to the richer socio-economic strata (₹22,377), reside in urban areas (₹23,135), and have non-communicable diseases (NCDs) (₹29,770). The enrolment of private or government health insurance does not impact the duration of hospitalization. The logistic regression results indicate that having private (odds: 0.35, CI: 0.32–0.40) and government (odds: 0.74, CI: 0.70–0.78) health insurance has a negative association with catastrophic health expenditure (CHE). Private health insurance led to a nearly 3.8-fold increase in the likelihood of opting for private hospitalization compared to individuals without insurance. However, private hospitalization was accompanied by 8.5 times higher CHE than government hospitalization. The early detection and treatment initiation could be delivered through the Primary Health Center (PHC). India has a vast network of PHCs, and the PHCs should be upgraded adequately with diagnostic and treatment facilities to detect and treat chronic conditions to help reduce the private hospitalization and duration of hospitalization, which will help to reduce the economic burden.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Availability of Data and Materials

Data is available on Ministry of Statistics and Programme implementation website. http://microdata.gov.in/nada43/index.php/catalog/152

References

  • Acharya, A., Vellakkal, S., Taylor, F., Masset, E., Satija, A., Burke, M., & Ebrahim, S. (2013). The impact of health insurance schemes for the informal sector in low-and middle-income countries: A systematic review. The World Bank Research Observer, 28(2), 236–266.

    Article  Google Scholar 

  • Aji, B., De Allegri, M., Souares, A., & Sauerborn, R. (2013). The impact of health insurance programs on out-of-pocket expenditures in Indonesia: An increase or a decrease? International Journal of Environmental Research and Public Health, 10(7), 2995–3013.

    Article  Google Scholar 

  • Alam, K., & Mahal, A. (2014). Economic impacts of health shocks on households in low and middle income countries: A review of the literature. Globalization and Health, 10(1), 1–18.

    Article  Google Scholar 

  • Anderson, M., Dobkin, C., & Gross, T. (2012). The effect of health insurance coverage on the use of medical services. American Economic Journal: Economic Policy, 4(1), 1–27.

    Google Scholar 

  • Azam, M. (2018). Does social health insurance reduce financial burden? Panel data evidence from India. World Development, 102, 1–17.

    Article  Google Scholar 

  • Azzani, M., Roslani, A. C., & Su, T. T. (2019). Determinants of household catastrophic health expenditure: A systematic review. The Malaysian Journal of Medical Sciences: MJMS, 26(1), 15.

    Article  Google Scholar 

  • Berki, S. E. (1986). A look at catastrophic medical expenses and the poor. Health Affairs, 5(4), 138–145.

    Article  Google Scholar 

  • Bhatia, J. C., & Cleland, J. (2001). Health-care seeking and expenditure by young Indian mothers in the public and private sectors. Health Policy and Planning, 16(1), 55–61.

    Article  Google Scholar 

  • Bloom, D. E., Chatterji, S., Kowal, P., Lloyd-Sherlock, P., McKee, M., Rechel, B., Rosenberg, L., & Smith, J. P. (2015). Macroeconomic implications of population ageing and selected policy responses. The Lancet, 385(9968), 649–657.

    Article  Google Scholar 

  • Cameron, A. C., & Trivedi, P. K. (1991). The role of income and health risk in the choice of health insurance: Evidence from Australia. Journal of Public Economics, 45(1), 1–28.

    Article  Google Scholar 

  • Cameron, A. C., Trivedi, P. K., Milne, F., & Piggott, J. (1988). A microeconometric model of the demand for health care and health insurance in Australia. The Review of Economic Studies, 55(1), 85–106.

    Article  Google Scholar 

  • Cavagnero, E., Carrin, G., & Aguilar-Rivera, A. M. (2006). Health Financing in Argentina: An empirical study of health care expenditure and utilization: Innovations in Health Financing. Working Paper Series 2006:8. Retrieved April 15, 2023, from https://cdi.mecon.gob.ar/bases/docelec/az1611.pdf

  • Chang, A. Y., Cowling, K., Micah, A. E., Chapin, A., Chen, C. S., Ikilezi, G., Sadat, N., Tsakalos, G., Wu, J., & Younker, T. (2019). Past, present, and future of global health financing: A review of development assistance, government, out-of-pocket, and other private spending on health for 195 countries, 1995–2050. The Lancet, 393(10187), 2233–2260.

    Article  Google Scholar 

  • Devadasan, N., Criel, B., Van Damme, W., Ranson, K., & Van der Stuyft, P. (2007). Indian community health insurance schemes provide partial protection against catastrophic health expenditure. BMC Health Services Research, 7(1), 1–11.

    Article  Google Scholar 

  • Devadasan, N., Ranson, K., Van Damme, W., Acharya, A., & Criel, B. (2006). The landscape of community health insurance in India: An overview based on 10 case studies. Health Policy, 78(2–3), 224–234.

    Article  Google Scholar 

  • Ekman, B. (2007). Catastrophic health payments and health insurance: Some counterintuitive evidence from one low-income country. Health Policy, 83(2–3), 304–313.

    Article  Google Scholar 

  • Escobar, M.-L., Griffin, C. C., & Shaw, R. P. (2011). The impact of health insurance in low- and middle-income countries. Brookings Institution Press.

  • Fernando, N. A. (2006). Understanding and dealing with high interest rates on microcredit: A note to policy makers in the Asia and Pacific region. Retrieved 10 April 10, 2023, from https://microfinancelessons.com/files/media_subdomain/resources/microcredit_interest_rates_adb.pdf

  • Getzen, T. E. (1992). Population aging and the growth of health expenditures. Journal of Gerontology, 47(3), S98–S104.

    Article  Google Scholar 

  • Ghosh, S. (2014). Publicly-financed health insurance for the poor: Understanding RSBY in Maharashtra. Economic and Political Weekly, 93–99.

  • Ghosh, S., & Gupta, N. D. (2017). Targeting and effects of Rashtriya Swasthya Bima Yojana on access to care and financial protection. Economic and Political Weekly, 52(4), 61–70.

    Google Scholar 

  • Haakenstad, A., Coates, M., Marx, A., Bukhman, G., & Verguet, S. (2019). Disaggregating catastrophic health expenditure by disease area: Cross-country estimates based on the World Health Surveys. BMC Medicine, 17, 1–9.

    Article  Google Scholar 

  • Harmon, C., & Nolan, B. (2001). Health insurance and health services utilization in Ireland. Health Economics, 10(2), 135–145.

    Article  Google Scholar 

  • He, S., Wu, F., Webster, C., & Liu, Y. (2010). Poverty concentration and determinants in China’s urban low-income neighbourhoods and social groups. International Journal of Urban and Regional Research, 34(2), 328–349.

    Article  Google Scholar 

  • Kankeu, H. T., Saksena, P., Xu, K., & Evans, D. B. (2013). The financial burden from non-communicable diseases in low-and middle-income countries: A literature review. Health Research Policy and Systems, 11(1), 1–12.

    Article  Google Scholar 

  • Kastor, A., & Mohanty, S. K. (2018). Disease-specific out-of-pocket and catastrophic health expenditure on hospitalization in India: Do Indian households face distress health financing? PLoS ONE, 13(5), e0196106.

    Article  Google Scholar 

  • La Forgia, G., & Nagpal, S. (2012). Government-sponsored health insurance in India: Are you covered? World Bank Publications.

  • Lubitz, J., Greenberg, L. G., Gorina, Y., Wartzman, L., & Gibson, D. (2001). Three decades of health care use by the elderly, 1965–1998. Health Affairs, 20(2), 19–32.

    Article  Google Scholar 

  • Madhukumar, S., Sudeepa, D., & Gaikwad, V. (2012). Awareness and perception regarding health insurance in Bangalore rural population. International Journal of Medicine and Public Health, 2(2).

  • Mahapatro, S. R., Singh, P., & Singh, Y. (2018). How effective health insurance schemes are in tackling economic burden of healthcare in India. Clinical Epidemiology and Global Health, 6(2), 75–82.

    Article  Google Scholar 

  • Ministry of Home Affairs. (2009). Report on causes of death in India, 2001–2003. Office of the Registrar General, India. Retrieved March 13, 2023, from http://www.cghr.org/wordpress/wp-content/uploads/Causes_of_death_2001-03.pdf

  • Mohanty, S. K., Chauhan, R. K., Mazumdar, S., & Srivastava, A. (2014). Out-of-pocket expenditure on health care among elderly and non-elderly households in India. Social Indicators Research, 115, 1137–1157.

    Article  Google Scholar 

  • Mohanty, S. K., Kim, R., Khan, P. K., & Subramanian, S. V. (2018). Geographic variation in household and catastrophic health spending in India: Assessing the relative importance of villages, districts, and States, 2011–2012. The Milbank Quarterly, 96(1), 167–206.

    Article  Google Scholar 

  • Murphy, A., Palafox, B., Walli-Attaei, M., Powell-Jackson, T., Rangarajan, S., Alhabib, K. F., Calik, K. B. T., Chifamba, J., Choudhury, T., & Dagenais, G. (2020). The household economic burden of non-communicable diseases in 18 countries. BMJ Global Health, 5(2), e002040.

    Article  Google Scholar 

  • Nandi, S., Schneider, H., & Dixit, P. (2017). Hospital utilization and out of pocket expenditure in public and private sectors under the universal government health insurance scheme in Chhattisgarh State, India: Lessons for universal health coverage. PLoS ONE, 12(11), e0187904.

    Article  Google Scholar 

  • NFHS. (2019). National Family Health Survey (NFHS-5). Retrieved March 4,  2023, from http://rchiips.org/nfhs/NFHS-5_State_Report.shtml

  • NFHS-3. (2015). National Family Health Survey. Retrieved June 6, 2023, from http://rchiips.org/nfhs/sub_report.shtml 

  • NHA. (2017). National Health Accounts | National Health Systems Resource Centre. Retrieved June 10,  2023, from https://nhsrcindia.org/national-health-accounts-records

  • NSSO. (2017). Retrieved March 4, 2023, from https://mospi.gov.in/NSSOa

  • Pandey, A., Ploubidis, G. B., Clarke, L., & Dandona, L. (2018). Trends in catastrophic health expenditure in India: 1993 to 2014. Bulletin of the World Health Organization, 96(1), 18.

    Article  Google Scholar 

  • Purohit, B. C., & Siddiqui, T. A. (1994). Utilisation of health services in India. Economic and Political Weekly, 1071–1080.

  • Ranjan, A., Dixit, P., Mukhopadhyay, I., & Thiagarajan, S. (2018). Effectiveness of government strategies for financial protection against costs of hospitalization Care in India. BMC Public Health, 18(1), 1–12.

    Article  Google Scholar 

  • Savage, E., & Wright, D. J. (2003). Moral hazard and adverse selection in Australian private hospitals: 1989–1990. Journal of Health Economics, 22(3), 331–359.

    Article  Google Scholar 

  • Selvaraj, S., & Karan, A. K. (2012). Why publicly-financed health insurance schemes are ineffective in providing financial risk protection. Economic and Political Weekly, 60–68.

  • Somkotra, T., & Lagrada, L. P. (2009). Which households are at risk of catastrophic health spending: Experience in Thailand after universal coverage: Exploring the reasons why some households still incur high levels of spending—even under universal coverage—can help policymakers devise solutions. Health Affairs, 28(Suppl1), w467–w478.

    Article  Google Scholar 

  • Sriram, S. (2018). Availability of infrastructure and manpower for primary health centers in a district in Andhra Pradesh, India. Journal of Family Medicine and Primary Care, 7(6), 1256.

    Article  Google Scholar 

  • Sriram, S. (2019). Are the subcenters adequately equipped to deliver primary healthcare? A study of public health manpower and infrastructure in the health district in Andhra Pradesh, India. Journal of Family Medicine and Primary Care, 8(1), 102.

    Article  Google Scholar 

  • Sriram, S., & Khan, M. M. (2020). Effect of health insurance program for the poor on out-of-pocket inpatient care cost in India: Evidence from a nationally representative cross-sectional survey. BMC Health Services Research, 20(1), 1–21.

    Article  Google Scholar 

  • Van Doorslaer, E., O’Donnell, O., Rannan-Eliya, R. P., Somanathan, A., Adhikari, S. R., Garg, C. C., Harbianto, D., Herrin, A. N., Huq, M. N., & Ibragimova, S. (2007). Catastrophic payments for health care in Asia. Health Economics, 16(11), 1159–1184.

    Article  Google Scholar 

  • Wooldridge, J. M. (2009). Introductory econometrics: A mod-em approach. South-Western, Cen-gage Learning.

  • World Bank. (2022). Current health expenditure as a share of GDP. Retrieved March 15, 2023, from https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS

  • World Health Organization. (2010). The world health report: Health systems financing: The path to universal coverage. World Health Organization. Retrieved March 10, 2023, from https://apps.who.int/iris/handle/10665/44371

  • Xu, K., Evans, D. B., Kawabata, K., Zeramdini, R., Klavus, J., & Murray, C. J. (2003). Household catastrophic health expenditure: A multicountry analysis. The Lancet, 362(9378), 111–117.

    Article  Google Scholar 

  • Yetim, B., İlgün, G., Çilhoroz, Y., Demirci, Ş., & Konca, M. (2021). The socioeconomic determinants of health expenditure in OECD: An examination on panel data. International Journal of Healthcare Management, 14(4), 1265–1269.

    Article  Google Scholar 

Download references

Funding

No funding was received for this work.

Author information

Authors and Affiliations

  1. International Institute for Population Sciences, Mumbai, 400088, India

    Mohit Pandey & T. R. Dilip

Authors
  1. Mohit Pandey
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. T. R. Dilip
    View author publications

    You can also search for this author in PubMed Google Scholar

Contributions

M. P. and T. R. D. collaborated to conceptualize the concept. M. P. took the lead in conducting the analysis and preparing the draft of the paper.

Corresponding authors

Correspondence to Mohit Pandey or T. R. Dilip.

Ethics declarations

Ethics Approval and Consent to Participate

Not applicable; this is a secondary data–based study. No individual could be identified or contacted; individual researchers required no ethics approval to undertake this study.

Consent for Publication

Not applicable for this study.

Conflict of Interest

The authors declare no competing interests.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Pandey, M., Dilip, T.R. Health Insurance as a Tool for Selecting Private Hospitalization and Mitigating Financial Burden in India: An Analysis of National Sample Survey Data. Glob Soc Welf (2023). https://doi.org/10.1007/s40609-023-00320-8

Download citation

  • Accepted:

  • Published:

  • DOI: https://doi.org/10.1007/s40609-023-00320-8

Keywords

Search

Navigation