Household out-of-pocket healthcare expenditure in India : levels, patterns and policy concerns

This paper uses the most recent wave of Consumer Expenditure Survey 2004-05 to examine the distribution of Out of Pocket (OOP) healthcare payments in India. The purpose of the paper is threefold; first, to analyse the magnitude and distribution of OOP spending across states and between rural and urban settings; second, to comprehend the impact of OOP payments on poverty and; third, to review progressivity of OOP payments vis-à-vis levels of healthcare utilisation. Further, to facilitate a temporal and systematic analysis the results are compared with few other earlier studies on the subject. In conclusion, the paper argues for policy initiatives to improve utilisation of healthcare services and to design financing mechanisms that safeguard poor from making unjust payments. Keywords: Healthcare Expenditure, Drugs Expenditure, Progressivity, Poverty, India. JEL Classification: I10, I12, I3