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Analysing catastrophic OOP health expenditure in India: Concepts, determinants and policy implications

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  • Rama Pal

    ()
    (Indira Gandhi Institute of Development Research
    Institute of Economic Growth)

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Abstract

The present paper attempts to modify definition of catastrophic out-of-pocket health expenditure by characterising it based on consumption of necessities. In literature, catastrophic expenditure is defined as that level of OOP health expenditure which exceeds some fixed proportion of household income or household's capacity to pay. In the present paper, catastrophic health expenditure is defined as one which reduces the non-health expenditure to a level where household is unable to maintain consumption of necessities. Based on this definition of catastrophic health expenditure, the paper examines determinants of catastrophic OOP health expenditure in India. Findings suggest that it is important to carefully revise the concept of catastrophic health care spending and the method developed in this paper can be considered as one of the possible alternatives. We find that education is one of the important policy instruments that can be used to reduce incidence of catastrophic spending in India. The findings also suggest that even after efforts to reduce differences among various social classes in India, socially deprived classes are still vulnerable as they are more likely to experience financial catastrophe due to illness.

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Bibliographic Info

Paper provided by Indira Gandhi Institute of Development Research, Mumbai, India in its series Indira Gandhi Institute of Development Research, Mumbai Working Papers with number 2010-001.

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Length: 27 pages
Date of creation: Feb 2010
Date of revision:
Handle: RePEc:ind:igiwpp:2010-001

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Keywords: Catastrophic health expenditure; Consumption of Necessities;

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  1. Alexander J. Cowell, 2006. "The relationship between education and health behavior: some empirical evidence," Health Economics, John Wiley & Sons, Ltd., vol. 15(2), pages 125-146.
  2. Gabriela Flores & Jaya Krishnakumar & Owen O'Donnell & Eddy van Doorslaer, 2008. "Coping with health-care costs: implications for the measurement of catastrophic expenditures and poverty," Health Economics, John Wiley & Sons, Ltd., vol. 17(12), pages 1393-1412.
  3. Michael Grossman, 1999. "The Human Capital Model of the Demand for Health," NBER Working Papers 7078, National Bureau of Economic Research, Inc.
  4. T. Krishna Kumar & Sushanta Mallick & Jayarama Holla, 2009. "Estimating Consumption Deprivation in India Using Survey Data: A State-Level Rural-Urban Analysis Before and During Reform Period," Journal of Development Studies, Taylor & Francis Journals, vol. 45(4), pages 441-470.
  5. Wagstaff, Adam, 2008. "Measuring financial protection in health," Policy Research Working Paper Series 4554, The World Bank.
  6. Adam Wagstaff & Eddy van Doorslaer, 2003. "Catastrophe and impoverishment in paying for health care: with applications to Vietnam 1993-1998," Health Economics, John Wiley & Sons, Ltd., vol. 12(11), pages 921-933.
  7. Salem Deenadayalan Vaishnavi & Umakant Dash, 2009. "Catastrophic payments for health care among households in urban Tamil Nadu, India," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(2), pages 169-184.
  8. Filmer, Deon & Pritchett, Lant, 1998. "Estimating wealth effects without expenditure data - or tears : with an application to educational enrollments in states of India," Policy Research Working Paper Series 1994, The World Bank.
  9. David H. Peters & Abdo S. Yazbeck & Rashmi R. Sharma & G. N. V. Ramana & Lant H. Pritchett & Adam Wagstaff, 2002. "Better Health Systems for India's Poor : Findings, Analysis, and Options," World Bank Publications, The World Bank, number 14080, January.
  10. Eddy van Doorslaer & Owen O'Donnell & Ravindra P. Rannan-Eliya & Aparnaa Somanathan & Shiva Raj Adhikari & Charu C. Garg & Deni Harbianto & Alejandro N. Herrin & Mohammed Nazmul Huq & Shamsia Ibragimo, 2007. "Catastrophic payments for health care in Asia," Health Economics, John Wiley & Sons, Ltd., vol. 16(11), pages 1159-1184.
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Cited by:
  1. Indrani Gupta & William Joe, 2013. "Refining estimates of catastrophic healthcare expenditure: an application in the Indian context," International Journal of Health Care Finance and Economics, Springer, vol. 13(2), pages 157-172, June.

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