Measuring the Magnitude of Health Expenditure Induced Removable Poverty in India

Abstract

By using nationally representative consumer expenditure surveys of three quinquennial rounds conducted by NSSO, authors have measured the health expenditure induced removable poverty in the form of ‘hidden’ and ‘reinforced’ poverty in India. The analysis shows that both the incidence and depth of poverty are substantially understated because of overlooking out-of-pocket (OOP) health expenditure in the country's standard measure of poverty. It is the outpatient care that contributes most to the health expenditure impoverishment of the households in India. Muslims, among all religious groups, Scheduled Castes among social groups, and casual laborers among different household groups are more vulnerable to OOP health expenditure induced removable poverty in India. Poverty, in general, has dropped significantly, but the share of health expenditure induced poverty in general poverty has increased substantially, especially in rural India in the past 20 years. Health insurance coverage can make a significant change in the country's poverty level but focus on a particular group of the population may not solve this problem because health expenditure induced poverty is not any group-specific.