Rural–urban differentials in out-of-pocket health expenditure and resultant impoverishment in India: evidence from NSSO 71st Round

Abstract

In low- and middle-income countries including India people often face the problem of affordability and access to health care, especially the poor and vulnerable. A high share of out-of-pocket (OOP) expenditure in total health expenditure puts a catastrophic burden on population and pushes them below the poverty line. Therefore, the present paper seeks to examine the level of economic burden and the resultant impoverishment of OOP expenditure among different socio-economic variables, separately for rural and urban areas in India. The current paper uses the cross-sectional data from the National Sample Survey Organisation (NSSO) 71st (Key indicators of social consumption in India: health, 71st round (January–June 2014). Ministry of Statistics and Programme Implementation, Government of India, New Delhi, 2014) round. Results reveal that in urban areas, the incidence of OOP health expenditure is concentrated towards poorer consumption groups, whereas in rural areas, it is pro-rich, especially at higher threshold levels. Rural population spent a higher proportion of consumption expenditure on health care, whereas average per capita health expenditure is higher in urban areas. Results also show that 8.1 and 7.9% population in rural and urban areas, respectively, fell below the poverty line due to OOP health expenditure. The poverty deepening is much higher in rural areas as compared to urban areas. Among different socio-economic variables, Muslims, Other Backward Classes, and casual labour have a higher burden of OOP health expenditure and poverty impact, especially in urban areas. We conclude that the unavoidable and extensive dependence on OOP health expenditure leads to poverty, thus making a strong case for the implementation of universal health coverage.