Medical Expenses on Rise in India
India has seen an unprecedented growth in the number of hospitals that have sprung up across the country. Despite this, WHO states that 70% of Indians continue to pay for the entire medical expenses from their pockets. In our neighboring countries like in Sri Lanka, only 30-40% of populations pays out of their pocket on medical expenditures.The National Sample Survey Office (NSSO) reports that expenditure on healthcare has increased from 6.6% to 6.9% in rural India, and from 5.2% to 5.5% in urban areas between 2004-05 and 2011-2012; while PwC’s Health Research Institute (HRI) estimates medical costs to rise up by 6.8% in 2015 from 6.5% estimate for 2014.
In a recent address, President Pranab Mukherjee expressed his concern that the majority of Indians, around 4 crore people, are pushed towards poverty every year because of medical expenses borne by them.
Another survey by the National Sample Survey Office suggest that the cost of treatment rose at a double-digit pace of growth, outpacing average inflation in both rural and urban India over the past decade till 2014. Also, 86% of rural Indian patients and 82% of urban Indian patients do not have access to any form of employer-provided or state-funded insurance. In states such as Punjab, Maharashtra, Uttar Pradesh and Haryana, an overwhelming majority of the population is turning to private hospitals for treatment.
Here are the main reasons for the surge in cost of Medical Expenses in India-
Increasing Medical Costs
The cost of medical facilities is set to increase with the rise in medical costs. The growth rate is slower than a decade ago as these costs outpace inflation. This has led to spiralling expenses that remain unchecked and go unnoticed by the public.
Higher reward for Medical Providers
Hospitals tend to pay doctors and medical providers under the fee-for-service system. Since the medical system is not integrated, there are repetitive tests and over-treatment procedures which are carried out. This can be both harmful and unwarranted as patients do not understand the nuances of the treatments that they undergo.
Growth of Chronic Illnesses & Obesity
There is a rise in chronic conditions like asthma, heart diseases and diabetes. This is due to the change in food patterns, climatic conditions and lifestyle choices. Obesity is also on the rise in urban regions and this leads to chronic illness and inflated medical spending.
Healthcare is not Consumerized
Since healthcare is not consumerized and only used by sections of society, the costs continue to rise. Since people continue to pay their medical expenses, there is no check on the rise of prices.
Lack of Cost Transparency
Even with consumers getting information from online sources and journals, there is no method to understand the treatment options and costs. This lack of cost transparency means consumers cannot make truly informed decisions.
Insufficient Public Healthcare System
Most government and public hospitals are low staffed and lack the basic requirements to function. This has resulted in a surge of private players that charge exuberant rates which leads to several families becoming poor. Public hospitals cannot keep up with the pace of private players and therefore fall behind.
Fewer Plan Options
Health Insurance companies provide plans that control costs. Therefore, they limit the plans and the provider networks. This results in finding fewer plan options and have reduced access to doctors and providers.
Surge in Pharmacy Costs
With the rise in costs of specific medicines, there is bound to be an increase in cost for medical healthcare and facilities. Similarly, some medicines have seen a huge surge in price due to availability and need.
With the right Health Insurance Plans, you will be safe and protected against these cost escalations in medical facilities. This will help you cover most of the costs that are usually covered in your insurance plan and keep you safe and well protected. Moreover, if you travel long distances, you should sign up for Travel Insurance as costs can escalate especially when travelling abroad. This is all the more important for all your family members as it is important to keep them safe and check costs. In spite of this, you must review and check all the details within the policy and review multiple providers before you sign up.