Changing pattern of household expenditure on health and the role of public health insurance schemes for the poor in India: case of Rashtriya Swasthya Bima Yojana

Thesis

Background: In order to protect the poor from health shocks, the Government of India launched Rashtriya Swasthya Bima Yojna (RSBY) in 2008. The objectives of this study are: a) to assess the changes in the financial burden of health care on the poor population; b) to estimate the effects of RSBY in reducing the financial burden on the poor; and c) to examine the impact of RSBY on the labour supply of the poor.

Methods: The study is based on data from the National Sample Survey Organisation (NSSO). The sample size is between 100-125 thousand households at the all-India level. The study uses pooled cross-section regression analysis to assess the changing pattern of out-of-pocket (OOP) payments on healthcare. The impact of RSBY on financial risk protection and labour force participation rate in India were estimated using the difference-in-differences (DID) method.

Findings: My thesis consists of three papers. The findings in the first paper, changing pattern of out-of-pocket payments, reflect that the poorest 20% of households, compared to the richest 20%, realised a slower increase in out-of-pocket as a share of the household’s total expenditure (-0.5%) and catastrophic payments (-2%) during the period of 2000-2012. However, during the same period, Scheduled caste/tribe and Muslim households reported an increased burden of out-of-pocket.

The second paper finds reduction in the probability of incurring ‘any inpatient expenditure’ and ‘catastrophic inpatient expenditure’ after RSBY intervention but marginal increase in the ‘per person monthly inpatient expenditure’ and insignificant change in ‘inpatient expenditure as a share of households’ total expenditure’. The effects of the scheme on the total out-of-pocket payment are negligible and non-drug expenditure reflected significant increase.

The third paper finds that women’s labour supply increased (3% per annum) but the elderly labour supply declined (1.5%). Further, men switched from self-employment to casual work while women moved to wage-paid regular and casual jobs at the cost of being self-employed.

Discussion and conclusion: The poor and other less advantaged population groups realised an increasing OOP burden mainly on account of two factors: i) outpatient care is not covered under RSBY; and ii) the benefit package under the scheme is very modest. Women’s labour supply increased and the elderly labour supply declined in favour of leisure because of possible improvements in health. However, the overall labour supply did not change. The Indian government needs to consider broadening the benefit package and including outpatient coverage under RSBY.

Authors: Karan, A

• Publication date: 2014
• DOI: 10.5287/ora-vedbya0dr
• Type of award: DPhil
• Level of award: Doctoral
• Awarding institution: Oxford University, UK
• Language: English
• Keywords: Out-of-pocket; India; Evaluation; RSBY
• Subjects: Health and health policy; Public Health; Evaluation of social policies,programmes and practice