The hard truth about out-of-pocket health expenditure, Pg7

Key Highlights:

• In India, Out-of-Pocket Expenditure (OOPE) is the primary source of healthcare financing for households.
• National Health Account (NHA) estimates indicate a decline in OOPE as a proportion of total health expenditure and GDP, with the latest share at 39% in 2021-22.
• Consumer Expenditure Survey (CES) 2022-23 data reveals that OOPE as a share of household consumption expenditure (HCE) has increased in both rural and urban areas.
• NHA estimates may not fully capture the impact of COVID-19 on household healthcare spending, as indicated by Consumer Pyramids Household Survey data.

Detailed Insights:

• India's healthcare system relies heavily on direct OOPE, forcing families to use savings, sell assets, or borrow money when a member gets sick, potentially leading to a cycle of poverty and ill-health.
• The NHA derives OOPE estimates mainly from the National Sample Survey (NSS), with the 2017-18 round (75th round) reporting a significant decline in OOPE from 64% in 2013-14 to 49% in 2017-18.
• The decline in OOPE reported by NHA could be attributed to a decrease in ailment reporting and hospital service utilization, rather than a reduction in healthcare costs.
• The Consumer Expenditure Survey (CES) 2022-23 shows an increase in OOPE's share of household consumption expenditure (HCE), rising from 5.5% to 5.9% in rural areas and from 6.9% to 7.1% in urban areas between 2011-12 and 2022-23.
• The Consumer Pyramids Household Survey indicates a 'V' shaped increase in OOPE during the COVID-19 years, a trend that current NHA estimates do not reflect.
• National Income Account (NIA) estimates show a steady increase in the share of household spending on health in GDP, contrasting with the decline shown in NHA numbers.
• The NSS Morbidity round is a crucial source of information on household healthcare spending, but it should be complemented with other data sources to create more realistic macro health policy numbers for national health accounts.

Key Concepts Involved:

• Out-of-Pocket Expenditure (OOPE): Direct payments made by individuals at the point of receiving healthcare services.
• National Health Account (NHA): A system that tracks health spending by various sources and channels in a given period.
• National Sample Survey (NSS): A series of surveys conducted by the National Statistical Office to collect data on various socio-economic aspects.