Demographic Change, Catastrophic Health Spending and Impoverishment in India

The share of private sector of total health expenditure in India is maximum with 78.05%, public sector at 19.67% and the external flows contribute 2.28%. In the contribution of private sector, households contribute a significant portion at 95%. This out-of-pocket (OOP) health spending is found to have increased further after 1990s. And this increase has negative consequences through increasing catastrophic health spending and impoverishment.

This paper focuses on the magnitude and changes of OOP expenditure and its impact on poverty by using two rounds of NSS data on health survey-NSS 52nd and 60th round. It is found that the OOP spending has increased and with greater magnitude among rural and relatively poor people in the post reform period, i.e. after 1990s. Similarly, the impact of increased OOP spending over poverty has been greater among rural and relatively poor people. This paper concludes with the fact that while new policies adopted in the health sector reform have significant impact on the increased health care cost and impoverishment, demographic transition also has had a significant impact. A substantial portion of change in OOP spending and impoverishment is found to be the result of age structure change over the two survey periods.