Socio-economic inequality in catastrophic health expenditure among households in India: A decomposition analysis

Abstract

The paper investigates the socioeconomic-related inequality in the incidence of catastrophic health expenditure (CHE) over the decade (2004–2014). We tested four hypotheses: (1) whether the incidence of CHE has changed over the decade? (2) Whether the inequality in the incidence of CHE is significantly pro-rich or pro-poor? (3) What are the major determinants contributing to inequality in CHE? and (4) Whether the change in various socio-economic determinants and health policies affects inequality over the decade? We have used two rounds of surveys: NSSO (2004 and 2014) and IHDS (2004–2005 and 2011–2012), and we adopted the generalized linear model with probit link function, concentration index (CI), and Oaxaca decomposition method for the study. The post-estimation decomposition method determines the major contributing factors to inequality and as well as its relative importance to the total inequality. We find that the mean out-of-pocket health expenditure has increased over the decade. Richer household is found to be spending more on inpatient care while the poor spend more on outpatient care. There has been a slight decrease in the incidences of CHE for outpatient care, but has significantly increase in inpatient care, particularly more towards the poor household. However, the inequality in incidences of CHE for inpatient care has decreased while in the case of outpatient care it has increased over the decade. The absence of any effective health insurance coverage, household size, income, and regional differences are found to be major contributing factors towards inequality in the incidence of CHE.