public and private healthcare

Centre for Public Policy Research, Kochi, undertook a study titled ‘Public and Private Healthcare Institutions: Preference and Expenditure Pattern’ in an attempt to identify the extent of and reasons for the user preference for the type of healthcare service and its resultant impact on expenditure pattern. The study was conducted among 85 households selected randomly in Panangad and Kaloor, a rural area and an urban centre, respectively.

The study infers that most of the respondents (more than 70 per cent),even those from low-income groups, preferred private healthcare services to public healthcare services.The respondents depended on public healthcare for routine preventive healthcare and utilised the services of private healthcare institutions for acute illness, trauma, injury, poisoning etc. The study did not find any significant relationship between the age group, household income, the mode of expenditure, education etc of the respondents and their preference for private healthcare services.

The study revealed access to advanced medical facilities under a single roof as the main reason for the respondents’ choice of private hospitals in both rural and urban areas. The second major reason for private healthcare preference is proximity of the healthcare facility in the rural area and approachability/friendly conduct of doctors and staff in the urban centre. While reliability is the third major reason in the urban centre,approachability/friendly conductof doctors and staff is the third reason in the rural area. In short, advanced medical facilities, reliability and approachability/friendly conduct of doctors and staffare the major reasons identified for the preference forprivate healthcare institutions. However, proximity is an equally important reason for the user preference for private hospitals in the rural area.

The overall average medical expenditure of a household in Kaloor and Panangad is estimated to be Rs 4207 per month. The medical expenditure of a household on private healthcare services is almost 24 times higher than that on public healthcare services. The medical expenditure on private healthcare in the urban centre is almost 65 per cent higher than that of the rural centre. The combined average expenditure of a household on private and public healthcare services is Rs 4928 per month in Kaloor and Rs 2886 per month in Panangad. This shows that the healthcare expenditure in the urban area is almost 71 per cent higher than that of the rural area.The point to be noted is that the difference in expenditure incurred is not for treating the same type of diseases. It simply shows the expenditure borne by the households under different healthcare systems.

The main source of healthcare expenditure is out-of-pocket expenses, which constitute 84 per cent of the total average expenditure. Governmental support (9 per cent), insurance claims (3 per cent), charity (1 per cent) and others (3 per cent)are the major sources of medical expenditure. The study reveals that low penetration of insurance coverage among the respondents is a cause of concern. Though 23 per cent of the respondents were insured, only 3per cent of the total health expenditure is met by way of insurance. The main obstacles for the high penetration of health insurance are expensive insurance policies, lack of awareness about the policies and complicated procedures.

The first implication of the study is that policy makers should take necessary steps to improve the facilities and offer quality services in public hospitals so that more people would make use of the facility.Second, considering the growing trend of dependence onspecialist doctors, there is a need to redefine the role of Primary Health Centres and Block Primary Health Centres to suit the current context and environment. The scope of improving the healthcare system through efficient intervention of the Local Self Government institutions is tremendous. This can improve the efficiency andeffectiveness and revive the long-lost glory of the State-sponsored healthcare system. Third,the government should push for more health insurance schemes,particularly among low-income groups, in order to lessen the financial burden arising out of treating critical illnesses/injuries.

Click here to read the full study: Public and Private Healthcare Institutions: Preference and Expenditure Pattern

Dr. Martin Patrick
Dr. Martin Patrick
Dr Martin Patrick is Chief Economist at CPPR. He holds a PhD in Applied Economics from the Cochin University of Science and Technology (CUSAT), Kochi and also had a post-doctoral training at Tilburg University, Netherlands. Presently, he is a Visiting Fellow at Indian Maritime Institute, and Xavier Institute of Management and Entrepreneurship, Ernakulam.

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