Rising Costs of Health Care in India
Rising Costs of Health Care in India
Rising healthcare costs are hitting Indians in a big way. While government hospitals provide medical treatment at a subsidized rate, factors such as large crowds, lack of hygiene, lack of the latest medical equipment and so on reduce their appeal. Even the poor prefer to go to private hospitals, despite their much higher costs. Given these facts, it is interesting to note that the percentage of the total population of India having some form of health insurance cover is a low 5 to 6%, as reported by an article on indiainfoline.com.
Increase in the Proportion of the Population Opting for Treatment
The National Sample Survey Organization periodically conducts surveys on healthcare. The most recent was the 71st round, conducted in the first half of 2014. Looking at the NSSO report, posted on the website mospi.nic.in, it is heartening to note that the percentage of the rural population that opted for medical treatment for their ailments jumped to 96% in the 2014 survey, from 82% in the 2004 survey. There was also an increase in the proportion of the urban population opting for medical treatment, from 90% in the 2004 survey to 97% in the 2014 survey. One point to note is that medical treatment as measured in 2014 includes AYUSH (Ayurveda, naturopathy, unani, siddhi, and homeopathy) related treatments, along with traditional allopathy. However, the proportion of the population using such treatments was a low 6.3% in the rural population and 6.7% in the urban population.
Trends in Healthcare Costs in India
According to an article on livemint.com, the average cost of hospitalization in rural India grew at a compound annual growth rate (CAGR) of 10.1% from the 2004 NSSO survey to the 2014 survey. The average hospitalization cost was Rs.5,695 in 2004, and Rs.14,935 in 2014. The average cost of hospitalization in urban India grew at a CAGR of 10.7% from 2004 to 2014. The numbers for urban India were Rs.8,851 and Rs.24,436 for 2004 and 2014 respectively. Assam was the most expensive state, with the average cost of hospitalization at Rs.47,064. The ratio of the population using private hospitals was 48.5%, just below the percentage of the population using public hospitals, which was 51.5%. The state with the lowest average cost of hospitalization, Rs.13,151, was Jharkhand. Interestingly, while 73.6% of Jharkhand’s population chose private hospitals, 26.4% chose public hospitals.
The Burden is the Highest on the Poorest Sections of the Population
The NSSO survey’s 71st round, conducted in the first half of 2014, also collected data on consumption patterns. According to an article on scroll.in, those in the poorest economic strata (defined as those with a monthly consumption expenditure of below Rs.800 and Rs.1,182 in rural and urban areas respectively) spent an average of Rs.11,805 and Rs.12,516 for one episode of hospitalization in rural and urban areas respectively. Clearly, one episode of hospitalization is a huge burden, given that it is almost equal to the annual consumption expenditure of a family in the poorest economic strata. A majority of the poorest section of India’s population remains unprotected by any form of government-sponsored health insurance cover, despite the introduction of the Rashtriya Swasthya Bima Yojana in 2015.
The Need for a Health Insurance Plan
According to an article on businesstoday.in, healthcare inflation is at 15%, compared to overall CPI inflation of around 6%. Given such data, it makes sense for individuals and families to opt for health insurance plans. The individual health insurance plans from Max Bupa provide cashless hospitalization coverage, with coverage amounts ranging from Rs.2 lakhs to Rs.1 crore. Family plans are also available, along with an optional critical illness cover and personal accident cover.