Burden of Private Healthcare Expenditure: A Study of Three Districts

  • C. S. VermaEmail author
  • Shivani Singh
Part of the India Studies in Business and Economics book series (ISBE)


Provision of affordable health care to all, irrespective of their paying capacity, is the fundamental duty of a welfare state like India. However, the state has failed to fulfill its promise to provide health security to all. Post liberalization, there is a shift from welfare-oriented government health policies to market-oriented policies. This has further resulted in unregulated and unaccountable expansion of private health care sector. With the involvement of corporate players, the scenario has clearly shifted from ‘mere privatization’ to commercialization and corporatization of the healthcare sector. The new National Health Policy (2017) also promotes such health policies that will further promote the commercialization of services even within public facilities. Although the country has emerged as one of the leading destinations for high-end private healthcare facilities, the private healthcare sector is heterogeneous, widely mal-distributed, and is hardly able to provide minimum quality of care. In a state like Uttar Pradesh, the increasing out-of-pocket expenditure on health is among one of the biggest causes of impoverishment. This article analyzes the pattern of healthcare expenditure in public and private healthcare sectors in the state and how private healthcare market is flourishing at the cost of public healthcare sector. For this, out-of-pocket expenditure (OOPE) on ambulatory care and inpatient care in public and private sectors has been assessed across a sample of 3338 household spread across 47 villages and 13 wards in three districts of Uttar Pradesh. Recall period for inpatient care was 365 days and for outpatient care was 30 days. The findings from the study suggest that although majority of people prefer private healthcare, the choice of private provider depends on the economic status of the people. People from lower economic group seek care from RMPs, unregistered, and informal providers while people from higher income groups seek care from high-end private facilities. The OOPE is high in both public as well as private, more so in private sector. Lack of trained personnel, drugs, and equipment in public healthcare sector is the cause of high OOPE there. The high costs of good quality private healthcare services further deprive the people of lower economic strata from proper healthcare services because of their lack of affordability. Low coverage under health insurance schemes like Rashtriya Swasthya Bima Yojana (RSBY) and dominance of private hospitals in providing treatment under the schemes has also resulted in failure of health insurance in reducing OOPE. Lack of proper regulatory and monitoring authority and legal provisions further leads to exorbitant prices and corrupt practices in private sector. In order to provide universal health coverage and ensure healthcare for all, it is the need of the hour to promote private healthcare sector, but at the same time, it needs to be properly regulated and monitored. The government should strengthen public health system by increasing the public expenditure on preventive and primary healthcare in order to reduce the OOPE on health.


Utilization of healthcare facilities Out-of-pocket expenditure on healthcare Impoverishment 


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© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  1. 1.Giri Institute of Development StudiesLucknowIndia

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