Abstract
As was noted in Chap. 1, a good amount of literature at the all India or by states now already exists to suggest that health expenditure in India and some other low-income countries in Asia is considerably large (Bonu et al. 2007; Gottret and Schieber 2006; O’Donnell et al. 2008; Xu et al. 2003, etc.). A great deal of this expenditure—almost three-quarters or in some cases even more—is borne privately by households in many of these countries, in particular those with inadequate health-care systems. In a large number of cases, OOP spending on health causes serious implications for low-income households and affects their sustained living by affecting their normal expenditure pattern, particularly on a host of important nonfood items. A number of these issues have begun to receive much wider attention in India over the past few years, particularly after the seminal report by the NCMH (Ministry of Health and Family Welfare 2005). There has also been a growing concern over these years regarding major policy failures on the part of the centre and state governments in providing adequate resources—physical, financial and human—to meet health-care needs of the people, in particular the poor and the needy. This Commission has also explicitly recognised in its report the prevalence of a very high OOP spending on health in several low-income states—in particular by the households in lowest income deciles—and its role in pushing a significant fraction of households to face poverty and debt trap (see Section 2 of the Commission’s Report, 2005). More or less, a similar inference was drawn in Chap. 3 of this study indicating a large fraction of households sliding below poverty level after incurring OOP expenses on health. Many of them had to borrow from private moneylenders with high repayment liabilities leading to asset divestments.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
See reports cited in footnote 3, Chap. 1.
- 2.
The following steps were taken to derive the mean share of OOP in households’ total (or per capita) consumption budget:
Step 1: \( OO{P}_{shar{e}_i}=OO{P}_i/{T}_{c_i} \) where i = 1, 2, …, N
OOP i is the health payments of the ith HHD i = 1, 2, …, N (where N is 2,010 for total sample).
\( {T}_{c_i} \) stands for total household consumption expenditure for the ith household.
As noted, N is the number of total households, by states, rural–urban or socioreligious characteristics.
Step 2: Mean = \( {\displaystyle \sum}_{i=1}^NOO{P}_{shar{e}_i}/N \)
A similar procedure was used to calculate OOP share in nonfood consumption expenditure.
Comparing shares of OOP spending separately on hospitalisation and outpatient care in total or nonfood consumption expenditures was not attempted because of certain data limitations and also to avoid the risks of recall lapses by households.
- 3.
See, for example, a comprehensive methodological note on catastrophic expenditures prepared by Xu (2004). It may also be noted that the OOP expenditure in this analysis does not include any form of reimbursement—insurance or noninsurance.
- 4.
Note that the incidence of catastrophic payment declines with every successive increase in z values.
- 5.
For an elaborate discussion on these concepts, see the WBI Learning Resources Series Analyzing Health Equity Using Household Survey Data: A Guide to Techniques and Their Implementation by O’Donnell et al. (2008).
- 6.
For a detailed discussion on distribution of u i and other related details of the probit model, see Maddla (2005, pp. 322–325).
- 7.
An exercise to estimate elasticities is currently in progress.
References
Agarwal, B. (1990). Social security and the family: Coping with seasonality and calamity in rural India. Journal of Peasant Studies, 17(3), 314–412.
Asian Development Bank. (2007). Key indicators 2007: Inequality in Asia. Manila: Asian Development Bank.
Bonu, S., Indu, B., & Peters, D. H. (2007, October). Incidence, intensity and correlates of catastrophic OOP health payment in India (ERD Working Paper Series No. 102). Manila: Asian Development Bank.
Garg, C., & Karan, A. K. (2009). Reducing out-of-pocket expenditures to reduce poverty: A disaggregated analysis at rural-urban and state level in India. Health Policy and Planning, 24(2), 116–128.
Gottret, P., & Schieber, G. (2006). Health financing revisited – A practitioner’s guide. Washington, DC: The World Bank.
Joglekar, R. (2008, September). Can insurance reduce catastrophic OOP health expenditure. Mumbai: Indira Gandhi Institute of Development Research, mimeo. Available at: http://www.igidr.ac.in/pdf/publication/WP-2008-016.pdf
Kawabata, K., Xu, K., & Carrin, G. (2002). Preventing impoverishment through protection against catastrophic health expenditure. Bulletin of the WHO, 80, 612.
Maddala, G. S. (2005). Introduction to econometrics (3rd ed.). Chichester: Wiley.
National Sample Survey Organisation. (2006a). Level and pattern of consumer expenditure, 2004–2005: 61st round, July 2004–June 2005. New Delhi: NSSO, Government of India, Ministry of Statistics and Programme Implementation.
National Sample Survey Organisation. (2006b). Morbidity, health care and the condition of the aged: 60th round (January–June 2004) (Report No. 507). New Delhi: NSSO. Available at: http://mospi.nic.in/rept%20_%20pubn/ftest.asp?rept_id=507&type=NSSO
NCMH, & MoHFW (Government of India). (2005, August). Report of the National Commission on Macroeconomics and Health, Chapter 2 on India’s health system: The financing and delivery of health care services (pp. 15–81). New Delhi: NCMH, MoHFW (Government of India).
O’Donnell, O., van Doorslaer, E., Wagstaff, A., & Lindelow, M. (2008). Analysing health equity using household survey data: A guide to techniques and their implementation. Washington, DC: The World Bank.
Peters, D. H., Yazbeck, A. S., Sharma, R. R., Ramana, G. N. V., Pritchett, L. H., & Wafstaff, A. (2002). Better health system for India’s poor: Findings, analysis and options. Washington, DC: The World Bank.
Ranson, M. K., Sinha, T., Chatterjee, M., Acharya, A., et al. (2006). Making health insurance work for the poor: Lessons from the Self-employed Women’s Association’s (SEWA) community-based health insurance scheme in India. Social Science & Medicine, 62, 707–720.
Roy, K., & Howard, D. H. (2007). Equity in OOP payments in hospital care: Evidence from India. Health Policy, 80(2), 297–307.
van Doorslaer, E., O’Donnell, O., Rannan-Eliya, R. P., et al. (2007, November). Catastrophic payments for health care in Asia. Health Economics, 16(11), 1159–1184.
Xu, K. (2004). Distribution of health payments and catastrophic expenditure methodology (Discussion Paper No. 2-2005 (EIP/HSF/DP.05.2)). Geneva: WHO. Available at: http://www.who.int/health_financing/documents/dp_e_05_2-distribution_of_health_payments.pdf
Xu, K., Evans, D. B., Kawabate, K., et al. (2003). Household catastrophic health expenditure: A multicountry analysis. The Lancet, 362(9378), 111–117.
Author information
Authors and Affiliations
Appendix
Appendix
Rights and permissions
Copyright information
© 2013 Springer India
About this chapter
Cite this chapter
Alam, M. (2013). Catastrophic Spending on Health by Sample Households: Some Results. In: Paying Out-of-Pocket for Drugs, Diagnostics and Medical Services. India Studies in Business and Economics. Springer, New Delhi. https://doi.org/10.1007/978-81-322-1281-2_5
Download citation
DOI: https://doi.org/10.1007/978-81-322-1281-2_5
Published:
Publisher Name: Springer, New Delhi
Print ISBN: 978-81-322-1280-5
Online ISBN: 978-81-322-1281-2
eBook Packages: Business and EconomicsEconomics and Finance (R0)