A record 55 million Indians were pushed into poverty in 2017 all because of the high out-of-pocket (OOP) health expenses. This is more than the population of three countries- South Korea, Spain or Kenya. 38 million people out of these were driven into poor conditions due to the high cost of medicines alone. This was revealed in a study conducted by the Public Health Foundation of India (PHFI) earlier this year

Let’s take an example

Mr Banerjee’s wife suffered a stroke recently and was rushed to the hospital. Two days later, he was still grappling with the aftermath of this news, when the hospital handed him a five digit bill to pay. He also had to run around to get medicines prescribed by the doctor.

Mr Banerjee made several trips to the ATM to take out his hard earned savings from the bank so that she could get uninterrupted care. After all, nothing was more important than the wellbeing of his wife.

The numbers above are indicative of the amount Indians spend on healthcare itself. National Health Accounts (NHA) estimates released this year reveal a dangerous trend. Out of pocket health expenses of Indian patients are a record high at 61 % of the total health expenditure, an amount that they bear all by themselves. The next statistic is shocking.

The healthcare spending of Indians from their pocket is twice than the public expenditure by Central and State governments. For FY2016, from the total healthcare spend of ₹5,28,484 crore in India, Indian households spent Rs3,20,211 crore entirely on their own. This is roughly 60.6 % of the total spending on health. The remaining 30.6 % equaling to ₹1,61,863 crore is the government’s share.

67 % of the healthcare spending of Indians is on medicine alone. Other payments that an average Indian incurs towards health are on fees of the doctor, hospitalization, laboratory tests, injectables, vitamin supplements and other OTC drugs both at public and private health facilities and chemists. This is despite several public health schemes rolled out by the government.

The National Health Policy 2017 proposed to raise India’s spending on healthcare, that currently stands at 1.15-1.5 % of GDP to 2.5 % by 2025. The total allocation to healthcare in budget 2019 increased by Rs 7000 crores to ₹ 61,398 crores. Out of this, ₹6,400 crores was directed towards launching Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY). However, it has hardly made any difference. This is because the amount for healthcare expenditure in India as a part of the budget, stands at 2.2 %, same as before.

More than 80 % of Indians pay healthcare providers directly. This number has only risen since the 90s. An average Indian’s out-of-pocket (OOP) health expenses at ₹2,494 are twice than the government spending at ₹1,261 today. Of the total amount that Indians spend on healthcare, medicines, contributed the largest chunk of 27.9 % at ₹1,38,061 crore, followed by 25.9 % at private general hospitals (₹1,28,011 crore). A meagre ₹64,585 crores or 13 % was spent towards treatment in government general hospitals.

India’s spending on healthcare including both the government and private sector contribution as a percentage of GDP stands at close to 3.9 %. The public sector contributes only one third of this that is just 30 %. Interestingly, developing and developed countries across the world spend more than this. Public sector spending stands at 46 % in Brazil, 56 % in China, 39 % in Indonesia, 48 % in the U.S. and the highest in the UK at 83 %.

Low spending on health by the public sector only increases healthcare spending of Indians, burdening them further. India’s spending on public health is lowest among BRICS’s countries. It even ranks 147 among 184 countries, below Pakistan, in this context.

Cancer with a monthly expenditure of ₹ 5,121 tops the list of conditions due to which Indians spend on healthcare. This includes both outpatient and inpatient care. Injuries in outpatient care (₹ 3,045) come a close second followed by heart-related diseases in inpatient care (₹ 2,808).

With the middle class Indian left to fend for his own health, the importance of critical illness insurance cannot be ruled out. This is more so since there has been a rise in the number of deaths due to cancer, stroke and cardiovascular diseases in India. As the government looks for ways to tackle the gap in public health, and new scientific advances are made to find possible cures and drugs for illnesses, your health is in your hands. Take steps towards a healthier, happier, financially secure life today.