Health expenditure

An array of bottlenecks has ensured that the numerous health insurance schemes introduced over the years have failed to make any significant dent on the health sector. This article tries to assess these problems by using the “insurance cascade,” a framework that traces the steps from enrolling eligible households to ultimately delivering their benefits. The existing evidence suggests substantial bottlenecks across all cascade steps, with especially large gaps in beneficiaries’ awareness of how to enrol in schemes, what the schemes covers, and how to access scheme benefits.

While the response to COVID-19 by the Government of India has been more or less uniform across the country, in that a lockdown was imposed throughout, the death rate has varied across the states. This suggests that region-specific factors are likely to be relevant to the determination of this rate. A significant aspect of this study is the use of three different measures of the death rate in the empirical exercise. This showed all three measures of the death rate to be strongly related to health expenditure as a share of the gross domestic product but hardly at all to public health infrastructure. This can be interpreted as a sign of the role of the public health system—comprising medical personnel, infrastructure and protocols—in the prevention of death, with health expenditure as a key determinant of its effectiveness. It has an implication for public policy beyond the immediate health emergency due to COVID-19.

Catastrophic household healthcare expenditure is a prominent policy concern. The National Health Policy 2017 takes explicit cognisance of this issue and presents an empirical formulation to examine its incidence and patterns. However, the policy needs to account for household size variations to counter an implicit bias that tilts the estimates to reflect a higher concentration of catastrophic expenditure among the rich. This concern is illustrated using health data from the 71st round of the National Sample Survey. Further, a minor modification to unravel the socio-economic gradient in catastrophic healthcare expenditure has also been discussed.

Road traffic fatalities constitute 16.6% of all deaths, making this the sixth leading cause of death in India, and a major contributor to socio-economic losses, the disability burden, and hospitalisation. An attempt to measure catastrophic levels of health expenditure on accidental injuries, road traffic accidents, and falls, finds that the burden of out-of-pocket expenditure is the highest for such injuries. The financial burden is particularly high for poorer households in rural areas, and those seeking treatment at private health facilities with no health insurance. Public health facilities for trauma care and health coverage for low-income groups could help these vulnerable households.