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Public and Private Divide in Health Care Spending in India: What Factors Explains the Gap?

Ram, Harchand (2019): Public and Private Divide in Health Care Spending in India: What Factors Explains the Gap?

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Abstract

The rising healthcare cost in low-income countries (LIC) got sparked attention during the last decades. A large part of healthcare expenditure is Out of Pocket (OOP) paid by households. The high cost of treatment was found to reduce essential household expenditure in low and middle-income countries. The burden of the high cost of illness resulting in their catastrophic health expenditure and affect health-seeking behavior with delayed treatment. This study has tried to understand how the hospitalization rate and health care spending are differential in the public and private healthcare facility, and with different types of morbidities. The nationwide survey NSS’s 71st round data has been used for this study. Both Bivariate and multivariate analyses were used. The Oaxaca decomposition has been applied to explain the gap in the means of healthcare expenditure between public and private facilities. The result of this study reveals that that 62 % patient used private facilities, while only 38 % used public health services for inpatient care. The patients with diseases of the genitourinary system preferred more for the private facility (75 %) than the public facility (25 %) among all diseases. The results from the multilevel analysis that the Doctors fees (26.9 %, p<0.001), Bed charges (21.6, p<0.001), expenses on medicines (16.5%, p<0.001) are the significant contributors in explaining the difference in mean expenditure in private and public health facility center in India.

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