Household Out-Of-Pocket expenses on health services push 55 million into poverty in India: WHO report

NEW DELHI:  Household Out-Of-Pocket (OOP) expenses on health services, especially medicines, continue to push over 55 million people in India into poverty, with over 18 per cent of households incurring catastrophic levels of health expenditures annually, says a WHO report.

Despite India’s billing as the ‘pharmacy of the world,’ its population’s access to medicines is severely restricted as nearly 65 per cent of all health spending is in the form of OOP spending by households, two-thirds of it on drugs.

The report, released on March 30, said sustained underfunding of public sector facilities and the rapid growth of private sector providers contributed to rising OOP costs on health care. A significant share, almost two-thirds of OOP expenses, are for purchasing outpatient care, especially medicines.

Citing Tamil Nadu Medical Services Corporation (TNMSC) as an “excellent example” for developing an innovative centralised procurement system alongside a decentralised distribution mechanism, the report said a reasonable share of government spending goes for medicines procurement, primarily essential generic medicines, which evidence has shown has helped in controlling OOP expenditure on medicines.

States like Rajasthan,  Kerala have followed the model and have achieved similar gains, added the report, published by the Asia Pacific Observatory on Health Systems and Policies based at WHO South-East Asia. 

However, the report said Tamil Nadu needs to expand its basket of medicines to cover non-communicable diseases and other chronic conditions.

Dr. Sakthivel Selvaraj, the lead writer of the report, said government spending must be accelerated to 2-2.5 per cent of GDP and minimum 15 per cent of government spending on healthcare must be spent on medicine procurement, especially generic medicines.