Cost of Illness: Evidence from a Study in Five Resource-Poor Locations in India

Indian Journal for Medical Research (New Delhi), Vol. 127, pp. 343-357, April 2008

15 Pages Posted: 24 Sep 2007 Last revised: 22 Jun 2008

See all articles by David M. Dror

David M. Dror

Micro Insurance Academy (MIA)

Olga van Putten-Rademaker

Delft University of Technology - Faculty of Technology, Policy and Management

Ruth Koren

Tel Aviv University - Professor Sackler Faculty of Medicine

Date Written: April 30, 2008

Abstract

Background & Objectives: In India, health services are funded largely through out-of-pocket spending (OOPS). The objective of this article is to provide data on the cost of an illness episode and parameters affecting cost.

Methods: The data was obtained through a household survey carried out in 2005 in five locations among resource-poor persons in rural or slum India. The analysis is based on self-reported illness episodes and their costs. The study is based on 3,531 households (representing 17,323 persons) and 4,316 illness episodes.

Results: The median cost of one illness episode was INR 340. When costs were calculated as % of monthly income per person, the median value was 73% of that monthly income, and could reach as much as 780% among the 10% most exposed households. The estimated median per-capita cost of illness was 6% of annual per-capita income. The ratio of direct costs to indirect costs was 67:30. The cost of illness was lower among females in all age groups, due to lower indirect costs. 61% of total illnesses, costing 37.4% of total OOPS, were due to acute illnesses; chronic diseases represented 17.7% of illnesses but 32% of costs. Our study shows that hospitalizations were the single most costly component on average, yet they accounted for only 11% of total on an aggregated basis, compared to drugs that accounted for 49% of total aggregated costs. Locations differ from each other in the absolute cost of care, in distribution of items composing the total cost of care, and in supply.

Interpretation & Conclusion: Interventions to reduce the cost of illness should be context-specific, as there is no one-size-fits-all model to establish the cost of healthcare for the entire sub-continent. Aggregated expenses, rather than only hospitalizations, can cause catastrophic consequences of illness.

Keywords: India, cost of illness, health expenditures, direct health expenditures, indirect health expenditures, rural population

Suggested Citation

Dror, David M. and van Putten-Rademaker, Olga and Koren, Ruth, Cost of Illness: Evidence from a Study in Five Resource-Poor Locations in India (April 30, 2008). Available at SSRN: https://ssrn.com/abstract=1016701

David M. Dror (Contact Author)

Micro Insurance Academy (MIA) ( email )

New Delhi, NCR
India
+41 78 790 6789 (Phone)

HOME PAGE: http://https://en.everybodywiki.com/

Olga Van Putten-Rademaker

Delft University of Technology - Faculty of Technology, Policy and Management ( email )

P.O. Box 5015
2600 GB Delft
Netherlands

Ruth Koren

Tel Aviv University - Professor Sackler Faculty of Medicine ( email )

Ramat Aviv
Tel-Aviv, 6997801
Israel

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