The 71st National Sample Survey data on consumption expenditure related to healthcare is a grim reminder of the state of the healthcare system in India. The broad message is clear: An increasing number of people are accessing healthcare from private facilities, which places a massive financial burden on them.

This trend is more pronounced in urban areas. Only a very small number of people are protected by insurance – either publicly funded or private. Consequently, a significant section report that in addition to relying on household savings for medical treatment, they are forced to borrow money, with some reporting that they are forced to sell assets to meet medical costs. The data indicates major variations across states, with Andhra Pradesh, Gujarat and Maharashtra emerging as states with the most privatised health systems.

The National Sample Survey reflects data collected in 2014. Overall, it shows that 71.7% people in rural areas and 78.8% people in urban areas accessed treatment from private facilities. This includes those who were admitted in hospital, and those who availed of out-patient care. Only 11.5% of people in rural areas, and 3.9% in urban areas received care from public primary care facilities such as dispensaries and primary health centres. This indicates the poor outreach of public facilities.

Reliance on private care

The recourse to public facilities has actually decreased since 1995-'96, and is a worrying trend. In rural areas, the number of hospitalised patients treated in public facilities has remained stagnant – 43.8% in 1995, 41.7% in 2004 and 41.9% in 2014. The National Rural Health Mission, initiated in 2005, while seemingly successful in arresting increasing privatisation, has not been able to reverse the trend. In urban areas, the for-profit private sector has expanded rapidly, and the number of hospitalised patients accessing public facilities has declined from 43.1% in 1995 to 38.2% in 2004 and further to 32% in 2014.

The data is corroborated by evidence of the rapid expansion of private hospital chains, which are often supported by a range of government subsidies, across urban India. Also, recourse to treatment in private facilities is not restricted only to the economically well off. Among the poorest economic class, 42.5% in rural areas and 52% in urban areas reported that they accessed hospital care through for-profit private facilities.

The growing dependence on private medical care places a significant burden on household expenditure. On an average, for every episode of hospitalisation, patients pay Rs 6,120 in the public sector and Rs 25,850 in the private sector – four times more in the latter. For certain ailments, the cost of treatment in the private sector is much higher – it stands at Rs 78,050 for cancer treatment and Rs 43,262 for heart ailments.

Patients are also being asked to pay significant amounts even when they are treated in public facilities. While disaggregated data is not available, it is likely that the bulk of expenses incurred in public facilities are on buying medicines and devices and on diagnostic procedures that are not provided free of cost in most public facilities.

Catastrophic impact

The impact of expenditure on medical care is clearly catastrophic, especially for the poorest households. The NSS data indicates that on an average the expenditure incurred on one episode of hospitalisation, for the poorest economic class (who report a household monthly consumer expenditure below Rs 800 in rural areas and below Rs 1,182 in urban areas) is Rs 11,805 and Rs 12,516 for rural and urban areas respectively. In other words, an episode of hospitalisation of one member of the family leads to a catastrophic financial burden – more than their entire year’s consumer expenditure – on India’s poorest families.

Hundreds of thousands of families, thus, are being forced into penury and destitution because of medical costs. The financial burden on poor families is not limited to hospitalisation. The poorest families also report an average expenditure of Rs 524 per episode of illness on out-patient treatment. The NSS data also indicates that families are forced to cover expenses by dipping into their savings, by borrowing from various sources, and even by selling assets. In rural India 67.8% of families reported that they met such costs from savings, 24.9% reported that they were forced to borrow money and 0.8% reported that they sold assets like land and jewelry.

The ruinous impact of medical expenses is particularly pronounced as only a minority is protected by any form of insurance in spite of the wide claims made by publicly funded social health insurance schemes like the Rashtriya Swasthya Bima Yojana. Only 14% of people in rural areas and 18% in urban areas were found to have some form of publicly funded insurance.

Paradoxically, the poorest were less likely to be covered by publicly funded insurance – 10% of the poorest class in rural areas, and 7.7% in urban areas had such insurance cover as compared to 17% and 15% from the richest class. Private insurance cover was negligible for all economic classes except for the richest class in urban areas – 12.4% of whom report some form of private insurance cover.

The gloomy picture that the NSS data paints of the Indian healthcare system should ordinarily be a cause for introspection and urgent remedial measures. We are steadily moving on a path where every illness in the household will push the entire family into a financial trap. Unfortunately, given the recent trends of cutting public health expenditure, it is difficult to believe that those who construct public policy are really paying attention.

Amit Sengupta is the national convenor, Jan Swasthya Abhiyan.