Catastrophic health expenditure

In simple terms, a catastrophic health expenditure is a healthcare-related bill that exceeds your capacity to pay. It often involves the encashment of savings and assets, including, at times, homes and businesses. It can impoverish and devastate families for many years.

Medicine is magical…(Paul Simon): Modern medicine is a great example of Arthur Clarke’s statement: “Any sufficiently advanced technology is indistinguishable from magic.” This magic show comes at a price. Formerly fatal illnesses can be salvaged by the ability to sustain and prolong life functions with machines, often well past the likelihood of meaningful quality of life after discharge.

Here’s the bill: In India, treatment in a fully-equipped Intensive Care Unit (ICU) with all life-support measures can cost a lakh or two rupees per day. Most ICU stays will last for a week to 10 days, some even more. So, do the math. In developed economies, the figures are equally high with proportional adjustments for living standards.

OOPs (out-of-pocket) expenditure: India has the world’s highest out-of-pocket (OOP) expenditure on health care – a stupendous 60% as opposed to the global average of about 15%. Here’s a graphic comparison.

Catastrophic health expenditure hits us Indians harder than any other society. It is estimated that catastrophic health expenditure impoverishes 3.3% of Indians every year.

  • It’s one of the leading causes of families being driven below the poverty line.

The need of the moment: More than any other, this devastating economic event makes a strong case for Universal Health Coverage (UHC) programmes. In advanced societies, particularly the United Kingdom and Western Europe, the existence of cradle-to-grave social welfare programmes buffers individuals from the cost.

The price of exit: It’s also worth pointing out that catastrophic health expenditure will usually occur in the last year or two of a person’s lifetime, contributing in no small way to the dissatisfaction with the spending. All this, only to see them die…?

Reference: Prevalence of catastrophic health expenditure and its associated factors, due to out-of-pocket health care expenses among households with and without chronic illness in Bangalore, India: a longitudinal study


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