Poor and non-poor differentials in household health spending in India

The rich-poor differentials in health outcomes such as life expectancy at birth, infant mortality rate and disability in India have remained large over time. Though health care is a basic input in the production of health and governed by the economic well-being of households, no study has examined the extent of poor and non-poor differentials in household health spending in India. The aim of this article is to examine the poor and non-poor differentials in household health spending in India.

The unit data from the 68th round of the consumption expenditure schedule of the National Sample Survey (NSS), which covered 101,662 households, is used in the analyses. Descriptive statistics, regression analyses and the Blinder-Oaxaca decomposition methods are used.

Household health spending is a significant determinant of longevity and infant survival in India. The monthly per capita household health spending (MPHHS) among the non-poor was 4.7 times higher than that of the poor. The ratio of poor and non-poor health spending varies from 2.7 each in the states of Assam and Bihar to 5.7 in the state of West Bengal. The MPHHS was 4.33 % of the monthly per capita consumption expenditure among the poor compared to 7.33 % among the non-poor linking health spending to ability to pay. Decomposition analyses reveal that the 86 % variation in poor and non-poor differentials is due to endowment. Economic well-being of the household explains the larger variation in health spending among the poor and the non-poor in India.

Affordable health services should be made available to the poor and needy to reduce the health inequalities of the population.