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Medical expenses for families grow faster than overall spending

mumbaipaper Updated: Jul 04, 2016, 12:50 IST
Aayushi Pratap
Aayushi Pratap

MUMBAI: An Indian household’s annual expense on healthcare grew twice as fast as total consumption expenditure between 1993 and 2012, said a study by Mumbai-based International Institute of Population Sciences that was published in the Journal of Public Health in April 2016.

While the per capita healthcare expenses of Indians grew at an annual rate of 6.3%, consumption expenditure, which included medical costs, grew 2.3%, said the study. Which mean if medical bills were Rs100 in a year, they grew to Rs106, while the total amount spent on all items increased from Rs100 to Rs102 in the same period.

“In other words, healthcare spending is running far ahead of spending on consumption items, leaving people with less money to spend on education, food and recreation,” said prof Sanjay Mohanty, author of the study.

For the study, consumption expenditure — a measure of living standards — was calculated as the total spending on more than 300 items, including food, education, fuel, clothing, medicines, hospitalisation and doctor’s fees. The researchers analysed data from the National Sample Surveys on consumption expenditure between 1994 and 2012 and arrived at the findings after adjusting it for inflation.

Per capita spending on health expenses increased from Rs914 to Rs1,347 during the period as compared to consumption expenditure which increased from Rs13,485 to Rs19,797.

The researchers attributed the rise in healthcare spending to increased use of advanced medical tests, growing elderly population and privatisation of health care. Among medical expenses, the money spent on medical tests grew the fastest — 37.4% annually.

Naresh Pahwa, 63, a resident of Gurgaon who managed a firm that manufactures paints, said he spends nearly Rs25,000 every month on medicines and checkups. “I have type-2 diabetes and a heart condition for which I underwent a bypass surgery recently. My insulin shots cost about Rs18,000 a month and the doctor’s visits an additional Rs1,500,” said Pawha.

Like many others, Pahwa said he prefers a private hospital over a public one. “They are clean and one doesn’t have to spend hours just waiting for the doctor. Having said that, it is expensive to shell out a huge sum on every visit,” he said.

Doctors said the easy availability of advanced tests have driven up the costs of medical treatment. “A lot of the new tests such as MRI, CT-scans have made it easy to detect diseases such as cancer, which we couldn’t two decades ago,” said Dr Nihar Mehta, cardiologist, Jaslok Hospital, Mumbai. “I agree that there is financial strain in getting these tests done, but is also resulting in increased survival and higher life expectancy.”

Dr Jitendra Gandhi, consultant paediatrician in Vadodara, Gujarat, who has been practising for the past 30 years said the younger breed of doctors tend to recommend medical tests more easily as compared to senior doctors. “I think they are more aggressive in recommending tests, maybe because they are trained that way. Some might argue that there is no harm in getting two or three extra tests done, but it is harming a patient, not physically but financially,” he said.

The study also found that the increase in the population of elderly (above 60 years) – from 6% to 9% - during the period has significantly contributed to the increased health expenditure of families. Findings say families that have at least three people over 40 spent Rs1,677 per head, as compared to Rs1,049 for families that don’t.

Additionally, the research highlighted that the rich in India spend at l east eight times more on healthcare as compared to the poor, linking affluence with the ability to pay for the services. The findings reveal that per head health spending of households from the richest sections of the country was Rs3,524 as compared to the poorest, which was Rs353. The richest and the poorest in the country were identified after dividing the population into five groups based on the earnings.

According to the study’s authors, if Indians are to keep a check on the rising medical expenses, public experts and policymakers must shift focus to the rising epidemic of non-communicable diseases (NCD) like diabetes and hypertension. “The main focus of the National Health Mission is on maternal and child health. Very little resources are allocated to the prevention and control of NCDs,” said Dr Mohanty. The authors said more government spending of health and use of generic medicines along with regulated recommendation of medical tests to patients may reduce the health spending of Indians.

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