Out-of-pocket payments (OOPs) are defined as the expenses that the patient or the family pays directly to the healthcare provider at the time of service use, without a third-party (insurer, or State). This excludes any prepayment for health services, for example, taxes or specific insurance premiums or contributions and, where possible, net of any reimbursements to the individual who made the payments.
Households, in general, avail healthcare services from public as well as private health care facilities, depending on their accessibility and affordability to these facilities. In Public Health Institutions, Government incurs expenditure for providing healthcare infrastructure as well as payment of salaries for medical staff, while in private sector hospitals, the service providers charge directly from households for their services. Although the services provided by Public Health Institutions are accessible to the public, mostly free of cost, in practice, there are various instances, where households have to pay ‘out of pocket expenditure’. These expenses could be medical as well as non-medical expenditure. Out of Pocket Medical expenditure could be payments towards doctor’s fees, medicine, diagnostics, operations, charges for blood, ambulance services etc, while non-medical expenditure include money spent towards travelling expenses, lodging charges of escort, attendant charges, etc.
OOP= (Household OOP expenditure for health during the past 12 months/ total annual household income x100 WHO).
An overwhelming 70% of healthcare expenses in India are met by out of pocket expenditure by the individual, due to which about 7% population is pushed below the poverty threshold every year. At 1.02% of its Gross Domestic Product (GDP), India’s public health expenditure is amongst the lowest in the world, lower than most low- income countries which spend 1.4% of their GDP on healthcare.
Unregulated direct charges often constitute a major access barrier to needed health care and contribute to high out-of-pocket payments generating problems of financial protection. Because of High Medical Fees many households are not able to use medical services and without getting proper advice from the professional, they tend to take self-medications which may lead to drug resistance. The poor sections do not have any form of financial protection and are forced to make OOP payments when they fall sick. Often, these households have to resort to borrowings or sell assets to meet this expenditure.World Health Organization define that whenever healthcare Expenditure is equal to or more then 40% of the total Household income then the condition is called Catastrophic Health expenditure, which may end up in poverty.
Strategies to reduce OOPs
* Abolish user fees and charges in public health facilities
* Target and exempt specific population groups such as the poor and vulnerable, pregnant women and children from official payments
* Target and exempt a range of health services such as maternal and child care from official payments and deliver them free of charge
* Partial or total exemptions for social aid beneficiaries, seniors, or people with chronic diseases or disabilities by capping direct payments, either in absolute terms or as a share of income.
In 2008, the Rashtriya Swasthya Bima Yojana (RSBY) was launched to safeguard the poor against the catastrophic consequences of high out-of -pocket expenses on health. It offered a cover of Rs 30,000 per annum to enrolled households. It is, however, limited to inpatient treatment or hospitalization. The programme has not led to any reduction in out- of- pocket expenditure due to low enrolment, inadequate insurance cover and the lack of coverage for outpatient costs. In September 2018, Government of India launched the Ayushman Bharat Scheme.
Ayushman Bharat Scheme
The scheme is targeted at poor, deprived rural families and identified occupational category of urban workers’ families. It aims to cover approximately 40% of India’s population spread across its rural and urban areas. So, if we were to go by the Socio- Economic Caste Census (SECC) 2011 data, 8.03 crore families in rural and 2.33 crore in urban areas will be entitled to be covered under this scheme, i.e., it will cover around 50 crore people.
It will have a defined benefit cover of Rs 5 lakh per family per year for secondary and tertiary care hospitalization. To ensure that nobody is left out, there will be no cap on the family size and age under this scheme. The scheme will be cashless and paperless at public hospitals and empanelled private hospitals.
Ayushman Bharat Scheme will be an entitlement based scheme, decided on the basis of deprivation criteria in the SECC database.
Rural area categories: The different categories in rural areas include families having only one room with kucha walls and kucha roof; families having no adult member between the ages of 16 years and 59 years; female- headed households with no adult male member between the ages of 16 years and 59 years; disabled members and no able- bodied adult member in the family; SC/ ST households; and landless households deriving major part of their income from manual casual labour; households without shelter, destitute, living on alms, manual scavenger families, primitive tribal groups, and legally released bonded labour.
Urban area categories: For urban areas, 11 defined occupational categories are entitled under the scheme. Main source of income related to household has been clarified in urban areas as beggars; rag-pickers; domestic workers; street vendors/ cobblers/ hawkers/ other service providers working on the streets; construction workers/ plumbers/ masons/ labor/ painters/ welders/ security guards/coolies and other head-load workers; Sweepers/ sanitation workers/ malis; Home-based workers/ artisans/ handicrafts workers/ tailors; Transport workers/ drivers/ conductors/helpers to drivers and conductors/cart pullers/ rickshaw pullers; shop workers/ assistants/ peons in small establishments/ helpers/ delivery assistants / attendants/ waiters; electricians/ mechanics/ assemblers/repair workers; washer-men/ chowkidars; Other work/Non-work ; Non-work (Pension/ Rent/ Interest,etc.)
The beneficiaries will not be required to pay any charges and premium for the hospitalisation expenses. The benefit also include pre- and post-hospitalisation expenses. Each empanelled hospital will have an ‘AyushmanMitra’ to assist patients and will coordinate with beneficiaries and the hospital. Benefits of the scheme are portable across the country and a beneficiary covered under the scheme will be allowed to take cashless benefits from any public/private empanelled hospitals across the country.
The health ministry has included 1,354 packages in the scheme under which treatment for coronary bypass, knee replacements and stenting among others would be provided at 15-20 per cent cheaper rates than the Central Government Health Scheme (CGHS).
With effective implementation, the scheme may have a positive impact on reducing out-of-pocket expenditure. In addition, the unmet needs of the population, which remained hidden due to lack of financial resources, will be catered to. This may lead to timely treatments, improvements in health outcomes, patient satisfaction, improvement in productivity and efficiency, and job creation, leading to improvement in overall quality of life.