Expanding financial risk protection in health in India:

Progress, challenges and opportunities

Dr. Charu C. Garg

Advisor, Health Care Financing,

National Health System Resource Center, MoHFW Acknowledgement: Ms. J Negi, Dr. R. Goyanka, Dr. R, Reddy

Health, the sustainable development goals (SDGs) and the role of universal health coverage (UHC): next steps in the South East Asia Region: ‘Reaching those who are left behind’

New Delhi, India, 30 March – 1 April 2016

Outline

• Incidence of OOPs and for those in poor income quintiles.

• Incidence of catastrophic healthcare expenditure due to out-of-pocket payments over time

• Impoverishment impact of out-of-pocket payments over time

• Socio-economic determinants associated with catastrophic health expenditure and impoverishment

Increasing OOPS but lower increase for ANC and PNC

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

2004

-05

2005

-06

2006

-07

2007

-08

2008

-09

2009

-10

2010

-11

201

1-1

2

2012

-13

2013

-14

At Constant prices

Inpatient

Outpatient

Prevention

Total OOP

•INSTITUTIONAL(I ncludes childbirth , Medical att. At death, abortion& still birth); Non INSTITUTIONAL(includes therapeutic appliances); ANC +PNC + Family Planning+ Immunization •NHSRC calculations from NSSO surveys

• OOPE increasing, maximum increase in institutional care, least increase in prevention

• Reduction in OOPE from 70% in 2004-05 to 64% of total health expenditures in 2013-14.

• OOP expenditures at 2.6 % of GDP

Incidence of OOPE by income quintiles

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

13.0%

13.5%

1 2 3 4 5 Total

OOPE % Average Annual consumption in quintile class

OOPS % Annual consumption

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1000000

1 2 3 4 5

Total annual OOPs (Rs. million)

Total annual OOPs (Rs. million)

Incidence of impoverishment: 2004-05 and 2011-12.

2004-05 2011-12

Head Count before OOP

Head Count after OOP

Net difference in Head Count

Head Count before OOP

Head Count after OOP

Net difference in Head Count

ALL INDIA (Rural) 33.46 37.8 4.34 14.85 17.82 2.97

ALL INDIA (URBAN) 31.12 34.22 3.1 13.43 15.42 1.99

Source: NHSRC calculations from Consumer Expenditure Surveys of NSSO 60th and 68th round

Using Tendulkar’s poverty lines (less than 1$ threshold) – All India 2.67% or 32 million fell below PL due to OOPs. Much lower than 63 million estimated in 2004-05.

Percentage of BPL facing OOP(out of the total BPL population)

55 59

76 76

0

10

20

30

40

50

60

70

80

90

Rural Urban

2004 2011

Source: CES 61st and 68th Round

Incidence of Catastrophic Health Expenditures • CHE is defined as households incurring more than 10% of Monthly

consumption expenditures on OOP

• Between 2005- 2012 CHE percent increased from 14.6% to 17.9%. (from Consumer expenditure Survey(CES).

These percentages changed from 19% in 2004-05 to 22 % in 2014-15 (from Health Morbidity Survey)

India 2004-05 2011-12

Rural 16 19

Urban 14 16

Factors influencing Financial Protection

Urban areas have higher per capita OOPs

498

1107

163

1767

955

1832

235

3022

636

1321

184

2141

0

500

1000

1500

2000

2500

3000

3500

Inpatient Outpatient Perinatal All India

Rural

Urban

Total

Per capita OOPS from NSSO 71st round: Social Consumption on health

Per capita out of pocket expenditures by region, 2014

309 314 347

386 407

505

372 411

560 600

672 646

773 810

1131

785

0

200

400

600

800

1000

1200

Male Female Male Female

Rural Urban

HSC,PHC,ANM,CHC,MMU Public hospitals

Private doctors/clinic Private hospital

• Expenditure across quintiles

Private sector, Females, and Lower quintile face larger OOPE for Non-hospitalized treatment (in Rs.)

1. Females incur higher expenditures in rural areas in both public and privte facilities 2. The average expenditure in private sector still continues to be very high as compared to that in public sector. 3. In rural, the poorest incur significantly higher expenditure as compared to other quintiles amd urban counterpart.

524

472

415

482 469

553

454

721

618

828

0

100

200

300

400

500

600

700

800

900

Rural Urban

Q1 Q2 Q3 Q4 Q5

Government insurance lead to lower OOPE for Inpatient treatment

5317 7262

10052 10435

16987

10366 8385

9817 7352

12978

19904

16012

7542 8470 11393

15239

32693

13870

0

5000

10000

15000

20000

25000

30000

35000

1 2 3 4 5 all

Consumption Quintiles

Government funded insurance scheme (e.g. RSBY, Arogyasri, CGHS, ESIS, etc.)

Insurance other than Govt. (private Insurance, Employer supported health protection )

Not covered by Insurance

Source: NHSRC’s own calculations from NSSO 71st Round: Social Consumption on health

Those with government insurance incur the lowest OOPE in most cases. In lower income quintiles and All India those with private insurance have higher OOP expenditures. In higher income quintiles, OOPE are higher, but is highest for non insured.

Average inpatient OOPE (medical)

Average inpatient OOPE (medical) (in Rs.)

Rising CHE: main cause IP care Outpatient care and drugs expenditure remain the biggest cause of HH facing CHE

2.54 3.17 4.79

10.64 11.03

12.24

10.38 10.25 11.19

14.29 14.57

17.92

0

2

4

6

8

10

12

14

16

18

20

2000 2005 2012

Inpatient OOP Outpatient OOP Drug OOP Total OOP

Source:. Based on calculations from CES by A. Karan, PHFI, personal communication.

Determinants of CHE social groups and elderly population

1.91

3.82

2.756

5.53

10.16

11.8

10.06

11.3

13.1

16.5

13.99

17.8

0

2

4

6

8

10

12

14

16

18

20

2000 2012 2000 2012

SC/ST Others

Inpatient Outpatient Total OOP

*Catastrophic at 10% of total household expenditure Source: Karan A, Selvaraj S, Mahal A (2014)

22.58

19.2

27.6

0

5

10

15

20

25

30

All Households % of HH with no elderly % of HH with at leastone elderly

% of HH facing 10% CHE_2014

% of HH facing 10% CHE

Soucre: NSSO 71st round: Social consumption on health

Poorer income quintiles face larger impoverishment and is increasing

2.52

3.29

6.3 6.11

3.3

4.69 4.43

6.64

3.67

1.54

0

1

2

3

4

5

6

7

Poorest 20% II III IV Richest 20%

2004 2011

Source: CES 61st and 68th Round

Financial Burden for informal and formal sector workers - District Shimla, 2014

26100 30831

18768 14801 16240

4407

7548

7280 12653 15294

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5

Number of HH facing CHE

Informal (106740) Formal (47182)

15

Source – Based on district level data compiled by NHSRC.

Informal Sector

Formal Sector

1 % of households that incur OOPE

39.9% 28.3%

2 % of Households facing Catastrophic health expenditure

13.8% 6.5%

3 Annual OOPE Per person suffering with a chronic illness (in $)

350 365

4 OOPE Per outpatient visit ($)

17 31

5 OOPE Per hospitalization in the last 365 days ($)

282 237

Informal workers: India-C.Garg 7/30/2014

Unmet needs for self reported illness

• Did not seek t treatment on medical advice • In 2004 - 17% in rural areas and 11% in urban areas • In 2014 fell to 14% in rural areas and 8% in urban areas.

• Did not seek any care • In 2004, 56% in rural and 61% in urban . In 2014 % improved to 30% in rural and 8%

in urban areas. Others sought some form of care (friends/self/other household members/medical shops etc.).

• Reasons for not seeking medical advice but sought some form of care • In rural areas, ailment not considered serious and non-availability of facility • In urban areas ailment not serious and financial constraints were the main reasons. • Financial constraint as a reason has declined drastically between 2004 and 2014

from 28% to 6% in rural areas and from 20% to 5%in urban areas • Low utilization of government facilities

• 35% for hospitalization and less than 22% for outpatient • Unsatisfactory quality of services and “long waiting queues”.

The Focus on RCH under NRHM helped to reduce Average OOPE and reach the targets

Contents

Percentage change (%) in OOPs between 2004 and 2014

ALL INDIA AVERAGE Rural Urban Average medical expenditure (Child Birth) - Public

-36% -5%

Average medical expenditure (Child Birth) - Private

69% 66%

Form Health Survey 2004 and 2014

71

%

74

%

79

%

82

%

83

%

85

%

60%65%70%75%80%85%90%

All India- % Institutional Deliveries against Reported Deliveries

74 69

64 59

55 52

58 58 57 55 53 50

47 44 42

37 37 37 36 35 34 33 31 29

20

30

40

50

60

70

80

2004 2005 2006 2007 2008 2009 2010 2011 2012

De

ath

s p

er

10

00

live

bir

ths

NMR

IMR UMR

Summary and key messages

• 3 measures of financial protection can provide different picture. • OOPs share in THE declined, • No. of persons becoming impoverished fell but OOPE for those already

impoverished increased. • No. of households with catastrophic health expenditures increased

• Focused and targeted spending is required for vulnerable and marginalized population especially for poor, elderly and women.

• Improved access for free medicine and diagnostics under public system, Medicines for Chronic should be a part of the package. Public sector availability and utilisation should be improved.

• Government Insurance coverage can help to reduce average OOPE.

Strategies for achieving financial protection

Increased total spending on health

Increased government spending on health: 1.7% of GDP or 45 % of total health spending by government required for Public health spending in 2013-14

Improved efficiency of government spending

• Increased Govt. spending (from 0.9% in 2004 to 1.12% in 2013-14) has led to larger fall in OOPS (from 2.95% of GDP in 2004 to 2.55 % OOP in GDP in 2013-14)

• Expanding government funded insurance coverage (RSBY and State Specific) for secondary and tertiary care (special coverage for informal sector and the elderly)

• Providing free drugs and diagnostics through National Health Mission – in states like Tamil Nadu and Rajasthan, average OOPS have declined substantially

• Increased utilization of Public facilities

• Demand side incentives and improvement in quality of services on supply side in public facilities

Thank You