Non-medical reasons account for one-fourth of expenses of Indian patients: Study

Non-medical expenses like travel, food and lodging account for nearly 25% of out-of-pocket expenditure that the families of Indian patients in hospitals bear, says a new research, providing fresh insights into how such expenses are spent.

In the case of outpatients, more than 60% of out-of-pocket expenditure goes to medicine purchase while 14.6% is expended for non-medical reasons. But for those admitted in hospitals, medicines cost 29% of the expenses as against 23.6% they spend on non-medical reasons.

“Non-medical costs may be the most underappreciated component of health expenditure. They mainly consist of expenditure on travel, accommodation, and similar items... Poor health infrastructure and unavailability of diagnostic tests are the prime reasons for medical travel,” said the research team with members from institutions in India and USA, and led by a senior scientist at Harvard Centre for Population and Developmental Sciences.

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In a detailed analysis of “out-of-pocket expenditures” involving more than 52,000 samples, the researchers broke down such expenditures to specific factors and their contributions.

The impact of out-of-pocket expenditure, according to previous studies, is catastrophic in India, pushing lakhs below the poverty line each year.

According to the new study, the per capita expenditure is Rs 21,385 ($299.3) for inpatients as against Rs 27,913 ($390.7) for those in outpatient departments (OPD). There is, however, a catch. For inpatients, it is a one-time expenditure whereas OPD expenses are spread over the time for which there is no reimbursement.

“Out-of-pocket expenditures may be catastrophic or impoverishing, and account for 58.7% of the national health expenditure in India,” the team noted in their study published in JAMA Network Open.

“Such excessive reliance on out-of-pocket expenditure creates a disproportionate burden on low-income individuals, accentuating income inequality and the medical poverty trap.”

Other critical expenses include doctors’ consultation fee (15.3% for inpatients and 12.4% for the OPD group) and diagnostic charges (12.3% in hospitals and 9.2% in OPD). There are also other medical expenses which are nearly 20% for patients in hospitals but only 3% for those attending OPD clinics.

The 2020 economic survey estimated that increasing public spending on health to 3% of the GDP would be associated with a decrease in out-of-pocket expenditure to 30% of total health expenditure from the current level of nearly 60%. However, despite promises by successive governments, India continues to spend just about 1% of GDP on healthcare.

The study came up with four distinct patterns: (1) medicine-dominated health expenditure (2) there is a high burden of non-medical healthcare cost (3) doctors’ fee and diagnostic charges vary with socio-economic status and (4) annual outpatient cost exceeded annual inpatient cost.

The findings, experts say, would open up intervention possibilities by the government and medical insurance companies.