Rural–urban differentials in out-of-pocket health expenditure and resultant impoverishment in India: evidence from NSSO 71st Round

Abstract

In low- and middle-income countries including India people often face the problem of affordability and access to health care, especially the poor and vulnerable. A high share of out-of-pocket (OOP) expenditure in total health expenditure puts a catastrophic burden on population and pushes them below the poverty line. Therefore, the present paper seeks to examine the level of economic burden and the resultant impoverishment of OOP expenditure among different socio-economic variables, separately for rural and urban areas in India. The current paper uses the cross-sectional data from the National Sample Survey Organisation (NSSO) 71st (Key indicators of social consumption in India: health, 71st round (January–June 2014). Ministry of Statistics and Programme Implementation, Government of India, New Delhi, 2014) round. Results reveal that in urban areas, the incidence of OOP health expenditure is concentrated towards poorer consumption groups, whereas in rural areas, it is pro-rich, especially at higher threshold levels. Rural population spent a higher proportion of consumption expenditure on health care, whereas average per capita health expenditure is higher in urban areas. Results also show that 8.1 and 7.9% population in rural and urban areas, respectively, fell below the poverty line due to OOP health expenditure. The poverty deepening is much higher in rural areas as compared to urban areas. Among different socio-economic variables, Muslims, Other Backward Classes, and casual labour have a higher burden of OOP health expenditure and poverty impact, especially in urban areas. We conclude that the unavoidable and extensive dependence on OOP health expenditure leads to poverty, thus making a strong case for the implementation of universal health coverage.

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Fig. 1

Notes

  1. 1.

    National Rural Health Mission (NRHM) is a flagship programme started by the government of India in 2005 to provide accessible, affordable and quality health care to the rural population in India.

Abbreviations

OOP:

Out-of-pocket

NSSO:

National Sample Survey Organisation

LMICs:

Low- and middle-income countries

CES:

Consumption expenditure surveys

MPG:

Mean positive gap

CI:

Concentration index

CPI:

Consumer price index

MPCE:

Monthly per capita consumption expenditure

TCE:

Total consumption expenditure

STs:

Scheduled tribes

SCs:

Scheduled castes

OBCs:

Other backward classes

GDP:

Gross domestic product

NRHM:

National rural health mission

PFHI:

Publicly financed health insurance

RAS:

Rajiv Aarogyasri health insurance scheme

CMCHIS:

Chief Minister’s comprehensive health insurance scheme

RSBY:

Rashtriya Swasthya Bima Yojana

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Correspondence to Ramna Thakur.

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Data availability

Data set has been purchased from the Ministry of Statistics and Programme Implementation (MOSPI) for the purpose of analysis.

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The authors have no conflict of interest.

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Sangar, S., Dutt, V. & Thakur, R. Rural–urban differentials in out-of-pocket health expenditure and resultant impoverishment in India: evidence from NSSO 71st Round. Asia-Pac J Reg Sci 3, 273–291 (2019). https://doi.org/10.1007/s41685-018-0095-z

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Keywords

  • Out-of-pocket
  • Burden
  • Impoverishment
  • Rural
  • Urban