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Catastrophic payments for health care among households in urban Tamil Nadu, India


  • Salem Deenadayalan Vaishnavi

    (Department of Humanities and Social Sciences, Indian Institute of Technology Madras, Chennai, India)

  • Umakant Dash

    (Department of Humanities and Social Sciences, Indian Institute of Technology Madras, Chennai, India)


Urban residents in India face important health problems due to unhygienic conditions, excessive crowding and lack of proper sanitation. The private sector has started occupying the centre stage of the health system and households are burdened with increasing levels of health expenditure. This paper aims to study out-of-pocket expenditure (OOPE) and the extent of catastrophic payments for health care among households in a highly urbanised state, Tamil Nadu. The study used data on morbidity and health care for the year 2004 collected by the National Sample Survey Organization, India. Care was sought for 84 per cent of illness episodes in urban areas, and the majority used private sector providers (67 per cent for inpatients and 78 per cent for outpatients). Mean OOPE for inpatients and outpatients was higher for households with higher income. The average cost burden per visit was higher among those who sought care from private providers for inpatient services (29 per cent of household consumption expenditure) and outpatient services (20% of household consumption expenditure) compared with the burden associated with public health service use (3-4 per cent of consumption expenditure). About 60 per cent of households which used private health services faced catastrophic payments at the 10 per cent threshold level. To avoid catastrophic expenditure, greater use of the public sector which is providing services at an affordable cost is needed. Improving access to public health services, better gate-keeping systems, stronger controls on drug prices and increasing the quality of services are required to reduce the incidence of catastrophic expenditure both on inpatients and outpatients. Greater use of risk pooling mechanisms would encourage the poor to seek health care and also to protect households from all socio-economic groups from catastrophic expenditure. Copyright © 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • 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.
  • Handle: RePEc:wly:jintdv:v:21:y:2009:i:2:p:169-184
    DOI: 10.1002/jid.1554

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    References listed on IDEAS

    1. Mark Montgomery & Paul Hewett, 2005. "Urban poverty and health in developing countries: Household and neighborhood Effects," Demography, Springer;Population Association of America (PAA), vol. 42(3), pages 397-425, August.
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    4. 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, September.
    5. Md. Azmal Kabir & Ataur Rahman & Sarah Salway & Jane Pryer, 2000. "Sickness among the urban poor: a barrier to livelihood security," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(5), pages 707-722.
    6. 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. Pal, Rama, 2010. "Borrowing for hospitalization in India," MPRA Paper 29404, University Library of Munich, Germany.
    2. Syed M. Ahsan & Syed Abdul Hamid & Shubhasish Barua, 2012. "Utilisation of Formal Health Care and Out-of-Pocket Payments in Rural Bangladesh," Working Papers 13, Institute of Microfinance (InM).
    3. Patrick Mullen & Divya Nair & Jayati Nigam & Katyayni Seth, 2016. "Urban Health Advantages and Penalties in India," World Bank Other Operational Studies 24025, The World Bank.
    4. Ergler, Christina R. & Sakdapolrak, Patrick & Bohle, Hans-Georg & Kearns, Robin A., 2011. "Entitlements to health care: Why is there a preference for private facilities among poorer residents of Chennai, India?," Social Science & Medicine, Elsevier, vol. 72(3), pages 327-337, February.
    5. Rama Pal, 2010. "Analysing Catastrophic OOP Health Expenditure in India : Concepts, Determinants and Policy Implications," Microeconomics Working Papers 22775, East Asian Bureau of Economic Research.
    6. Rama Pal, 2012. "Measuring incidence of catastrophic out-of-pocket health expenditure: with application to India," International Journal of Health Economics and Management, Springer, vol. 12(1), pages 63-85, March.

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