PAYING FOR HEALTHCARE IN INDIA: FINANCING CHALLENGES AND LONG-TERM PROJECTION OF HEALTHCARE COSTS

Abstract

This paper is an attempt to present a detailed picture of the state of health financing and health expenditure in India. This is pursued first by way of identifying the challenges facing health financing in India, evidenced from primary research (administration of structured survey) and secondary research (Industry, Government and other organization reports). The investigation and further foray into alternatives of health payments stem from the fact that over 80% of Indians do not have any kind of health insurance. Out of pocket expenditure is the predominant source of financing when it comes to a chronic health condition or some accident leading to hospitalization. This expenditure carves a big hole in the budget of the entire household in many cases. The problem is aggravated due to a relatively greater number of ailments being treated at Private hospitals which charge more (data suggests). Further the study intends to project the future scenario in the country by developing a model to project long term per capita healthcare costs due to the factors explaining the rise and fall in healthcare costs. Multiple Linear Regression technique has been used to create the model. Lastly, inspired by the adoption of value-based payments to healthcare providers in the West, further research for introducing alternative payment models in the Indian context is proposed as a way to reduce the effective cost to the patient.