Impact of Out-of-Pocket Health Expenditure on Poverty in India

Rajabushan Jagadish Nayak, Sri Sathya Sai Institute of Higher Learning
Prasant Blon, Sri Sathya Sai Institute of Higher Learning
Ashish Singh, Indian Institute of Technology Bombay

As per the World Bank, approximately 11.09% of India’s population is below the poverty line. Also, of the total health expenditure, 48.2% consists of out-of-pocket health expenditures (OOPHE) for the population in poverty. Thus, OOPHE is a major reason pushing households into poverty. Therefore, we seek to estimate the impact of OOPHE on poverty in India. We use data from the nationally representative survey on Household Social Consumption: Health (2017-2018) and estimate poverty gap at household level before and after making the OOPHE. Further, binary probit model was used for predicting the effects of various factors on the incidence of poverty due to OOPHE. We find that the duration of hospitalization, household size, and usage of private healthcare as significant determinants leading to impoverishment. Also, the implementation of various healthcare schemes and public health initiatives have not been substantial as it is found to be limited and a significant proportion of the population is left with no health coverage. Findings stress on the need for the expansion of public health insurance coverage for safeguarding households against falling into poverty.

Keywords: Health and Morbidity, Population and Development

See extended abstract.