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Distress financing of out‐of‐pocket health expenditure in India

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  • Shivendra Sangar
  • Varun Dutt
  • Ramna Thakur

Abstract

In the absence of a universal health insurance mechanism, the increasing burden of out‐of‐pocket (OOP) health expenditure has become a growing concern in India. To cope with the cost of illness, people use either their savings and income, or they have to rely upon distress means of finance such as depletion of household assets, borrowings from banks and moneylenders, and contributions from family and friends. This paper analyses the changes that have taken place in the incidence and covariates of distress financing in India by using data from National Sample Survey Organisation for the years 2004 and 2014. Results indicate that during this period the incidence of distress sources as a means to finance OOP health expenditure has hovered around 50%. Further, the results reveal a significant socioeconomic gradient in the incidence of distress financing. Socioeconomic and health‐related covariates significantly impact the likelihood of distress financing as a means to cope with OOP health expenditure. The results indicate the need for government action to formulate a comprehensive plan through an increase in public spending on health care that will improve the quantity and quality of the public health‐care system and enhance the scope of health insurance in India.

Suggested Citation

  • Shivendra Sangar & Varun Dutt & Ramna Thakur, 2019. "Distress financing of out‐of‐pocket health expenditure in India," Review of Development Economics, Wiley Blackwell, vol. 23(1), pages 314-330, February.
  • Handle: RePEc:bla:rdevec:v:23:y:2019:i:1:p:314-330
    DOI: 10.1111/rode.12540
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    Cited by:

    1. Hao Dong & Zhenghui Li & Pierre Failler, 2020. "The Impact of Business Cycle on Health Financing: Subsidized, Voluntary and Out-of-Pocket Health Spending," IJERPH, MDPI, vol. 17(6), pages 1-24, March.

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