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Business News/ Politics / Policy/  Medical costs at private hospitals higher than most households’ annual income: report
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Medical costs at private hospitals higher than most households’ annual income: report

EY estimates while the average cost of tertiary care procedures is `2-4 lakh, the annual household income is `1,57,683

The cost of out-patient treatment and disease management is prohibitively high for 20% to 40% of India’s population, the EY report said. Photo: Hindustan TimesPremium
The cost of out-patient treatment and disease management is prohibitively high for 20% to 40% of India’s population, the EY report said. Photo: Hindustan Times

Mumbai: The cost of key surgeries and medical procedures in many private hospitals is higher than the annual household income of between 60% and 90% of India’s population, according to a report by audit and consulting firm EY.

The EY report, which was released in the last week of September, analyses the affordability of quality healthcare in India and the need of healthcare innovation in the context of government’s proposed universal healthcare coverage.

The report estimates average cost of tertiary care procedures including bypass surgery, angioplasty, neurosurgery, oncology radiation and surgery, and renal and liver transplants in the range of 2,00,000 to 4,00,000, which is more than the annual average household income of all Indians.

India’s average household income was 1,57,683 in 2012-13, according to a March 2014 CMIE report.

The EY study says that just about 300 million people in India have some form of health insurance .

“However, even government sponsored insurance models which constitute significant share of covered population may not find it tenable to finance healthcare delivery at these (the above mentioned) costs," said the report.

Nearly 60% of in-patients and 80% of out-patients in the country opt for treatment from private providers, even though this is costlier, and largely because of concerns about the quality of healthcare in public hospitals, the report added.

The cost of out-patient treatment and disease management is prohibitively high for 20% to 40% of India’s population, the report said.

Explaining the out-patient treatment regimen, it added: “If proper disease management guidelines are followed, monthly cost of diabetes management at present is more than half the monthly household expenditure on food for about 35% of India’s population."

Similarly, the cost of radiology diagnostics is higher than half the monthly household expenditure on food of 60% of the population and the cost of pathology tests is greater than half the monthly household food expenditure of one-fifth.

Out-patient expenditure is not covered under public or private insurance schemes currently.

India’s ambitious universal health coverage programme aims to provide innovative schemes of health insurance, mostly government funded, for the public. The project, which will necessarily see the government healthcare expenditure go much beyond the current 1% of the GDP, is yet to be formalized.

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Published: 07 Oct 2014, 04:26 PM IST
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