Out-of-Pocket Health Care Expenditure and Poverty in Assam

Abstract

Spending on health care is considered as an investment by many countries of the world. Nevertheless, many developing countries hitherto have not allocated sufficient resources to fund their health care systems. Some due to resource constraint but others due to ignorance or health care is not in a political discourse. Out-ofpocket (OOP) spending on health care has the power to distort the economic well-being of the households who make, especially the less income groups. However, in most of the developing countries the medical insurance facility is still in a meager existence and thus, when people get health shocks they have to make the payments from their pocket. This can push the people into the pool of poverty and poverty trap to those who are poor. The percentage of poor people in Assam has been increasing from 34.4% in 2004-05 to 37.9% in 2009-10. As per the ‘Poverty Estimates for 2011-12’, based on the Tendulkar Methodology, around 101.27 lakh or 1.01 crore of Assam’s population are categorized as Below Poverty Line (BPL). Furthermore, all through the period from 2004-06 to 2011-13, the maternal mortality ratio (MMR) of Assam has been higher than the all India average. In 2014 Assam had infant mortality rate (IMR) of 49 (equal to all India average) and stands the highest amongst the north eastern states of India. Therefore, this calls for investigating the government spending on health care and subsequently, the amount of OOP spending. Thus, this paper looked into the government health spending and OOP spending on health care. Based on Reserve Bank of India data on health care spending, it has been found that the public health care spending of Assam is lower than two percent of its Gross State Domestic Product (GSDP). The analysis done based on NSSO 71st round, the OOP expenditure on health care has been higher than North East India average and All India average. Thus, to mitigate the menace of poverty and increase the health status of the people, the paper concludes that the government spending in Assam on health care needs to be increased beyond the 2% (or more) of GSDP.