may be one of the leading destinations in the world for Health Care Tourism
because of its low cost health care system, but sadly this very same system is
failing its own population. India's problem with medical expenses is however
quite different from the health care crisis of the United States, where the
free market system in the latter allowed medical institutions and insurance
companies to function solely on profits instead of service.
has a mixed economy and there are plenty of hospitals run by the government
that provide health care for free, or at nominal costs, making essential
medical services affordable to all. The country's public spending on health
care is dismal with public financing for India's health care accounting for
less than 1% of global health care expenditure, despite the fact that the
country accounts for 16% of the global population.
health care crisis is one that stems from government apathy and unrestricted
population growth that in turn subjects the health care infrastructure to
incredible strain — a burden that will only increase in the coming years. As is
the rule of economics, inflation sets in when growing demand is met with
diminishing supply and this is also true for medical services. Our mixed
economy notwithstanding, we are rapidly approaching breaking point because of
several oversights and issues.
Burgeoning Medical Expenses in
put this into perspective, it may help to look at some of the figures that
reveal just how bad the problem is. Statistical data from World Health
Organization also reveals some of the reasons for these escalating costs.
According to WHO, despite the availability of health insurance in the country,
most Indians are not covered and over two-thirds of the population still pay
for medical treatments out of their own pocket. This means that people make
huge payments towards health care out of their personal finances, rather than
relying on insurance companies
. In comparison, less than half the
population in Sri Lanka and most other Asian countries rely on personal finances
to make medical payments.
Records from the National
Sample Survey Office (NSSO) also reveal that healthcare expenditure in the
country has risen in both rural and urban India, with a rise from 6.6% to 6.9%
and 5.2% to 5.5% respectively between 2005 and 2012. PwC's Health Research
Institute estimates a further rise in costs this year from the 6.5% estimate
for 2014 to 6.8% this year.
As medical costs escalate,
the burden of 'out of the pocket' payments increases. Families can be left
impoverished because of medical expenses and this often perpetuates a vicious
cycle of borrowing, debt and bankruptcy. It may be surprising that so many
millions of Indians are uninsured but reality is, only those who can least
afford health care have no insurance and therefore have to pay the most.
The main reason for the poor
insurance coverage is a lack of awareness among the general population. India
has a number of private and government funded health insurers and a huge
section of the population has some kind of access to health insurance. A few
years ago, the General Insurance Corporation of India and the Insurance
Regulatory and Development Authority even launched an initiative to increase public
awareness about the need for health insurance and the cost of delaying
enrollment. People often tend to procrastinate over tasks they do not see as
urgent, especially if it involves a financial cost. Unfortunately, such delays
can prove to be financially debilitating in the face of increase in medical emergency
care and hospital
Why are Medical Costs Hitting
Indian Households so Hard?
rising cost of health care is pushing up expenses as most Indians do not rely
on health insurance, despite the fact that they could recover most of the costs
of hospitalisation and medical care with insurance. Surveys suggest that just
10% of households have insurance for just a single member of the family. Some
of the main factors that drive up health care costs for Indian families include
Public vs Private Hospitals
has some of the best doctors in the world and many of them serve in government
hospitals where treatment is affordable. Unfortunately, with our huge
population and a concentration of low income population, these government
services are stretched thin. As the demand for service increases so too does
the waiting time to acquire any service. This increased waiting time drives
many into the arms of private medical facilities where they are often squeezed
Medical Facilities and
rate of expansion of medical colleges and medical institutions cannot keep pace
with our rising population and this is imposing ever greater pressure on an
already strained system. As these pressures increase, so does the cost of
medical specialisation and training, and the costs of services provided by
specialists who graduate from these institutes and so on.
Cost of Medications
India has regulations to control drug prices unlike the United States, the cost
of new drug development and other specialised medications has to be borne by
the consumer. Pharmaceutical companies are profit driven and their costs are
ultimately passed on to consumers.
Clinical and Hospital Equipment
new strides being made in technology all the time, clinics and hospitals alike
need to keep upgrading their medical equipment whether for diagnostics or
treatment. Patients who need to avail of these services ultimately pay the
price and this can really hit you hard if you have to pay from your pocket. For
example, standard imaging tests like MRIs and CT Scans
can cost anywhere from Rs.5,000-Rs.12,000,
obviously depending on the location and reputation of the clinic among other
is a growing problem, especially in urban areas. Lifestyle diseases
are prevalent in most
cities in India and diseases like cancer, coronary heart disease and diabetes
really hit hard because the debt incurred from medical care for patients
suffering from these conditions builds up over time. Moreover, lifestyle
diseases affect both young and aged adults, often straining finances,
especially in households with single wage earners. In such situations, the wage
earner may be forced to seek loans to pay for medical expenses in the absence
of insurance coverage for one's self or parents or siblings. Debt incurred
through borrowing is generally the hardest to repay and failing to make timely
payments results in late fees and penalties that exacerbate the problem.
Is there a Solution?
theoretically, health care is available to all Indians, it is often
inaccessible or unaffordable for various reasons. Any solution to India's health
care crisis will probably take decades to come to fruition and this is time
that we sorely lack. The crisis is expected to worsen considerably within the
coming decades as India's population is expected 1.4 billion by 2030, which
would put it ahead of even China, as the most populous country. There can be no
denying that the first step to finding any lasting solution for almost all of
India's ills would be to address the population crisis.
awareness among the population is absolutely vital as insurance can help shield
the population from unforeseen medical expenses. People need to be made aware
of low income health insurance
low cost health insurance plans so that more people are encouraged to move
towards using health insurance as opposed to relying on out of the pocket
payments for medical care.
importance of preventive health care should be highlighted and emphasized as
this could be the biggest cost saver in every regard. Preventive care goes
beyond medical care with routine checks and tests, although this is an
important part of preventive care. For example, the timely detection of
hypertension can prevent more serious conditions like stroke or heart
which can put an even greater strain on finances. In addition
to preventive medicine however, our population also needs to be encouraged and
educated about health living. Information dissemination plays a crucial role in
this regard as a well-informed population is likely to make healthier choices.
a positive note however, there has been a growing move towards health
insurance, with awareness campaigns boosting these figures in the past decade.
While there were just 55 million Indians with health coverage in 2003-4, this
figure rose to 300 million in just 5-6 years. Going by these trends, the number
of Indians with health coverage should touch 630 million by the end of this