Out of pocket expenditure
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, particularly Primary Health Centres / Government hospitals are accessible to the public, mostly free of cost, in practice, there are various instances, where households have to pay ‘out of pocket expenditure’. The expenses that the patient or the family pays directly to the health care provider, without a third-party (insurer, or State) is known as ‘Out of Pocket Expenditure’ (OOP). 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.
Out-of-pocket expenditure (OOP) on healthcare forms a major barrier to health seeking behaviour. 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. In literature, Catastrophic Out of Pocket Expenditure is defined as that level of out of pocket expenditure which exceeds some fixed proportion of household income or household’s capacity to pay. As per National Health Accounts (NHA) of India (2004-05), 71.13% of Total Health Expenditure in India is considered to be ‘Out of Pocket Expenditure’ by the individuals / households. NHA takes into account only ‘out of pocket’ towards medical expenditure.