A whopping 63 million people are faced with poverty every year due to “catastrophic” expenditure over healthcare which neutralises the gains of rising income and various government schemes aimed to reduce poverty, according to the Health Ministry.

The draft of National Health Policy cites this as a significant reason for a new health charter as it seeks to ensure universal access to affordable health care.

“Incidence of catastrophic expenditure due to healthcare costs is growing and is now being estimated to be one of the major contributors to poverty. The drain on family incomes due to healthcare costs can neutralise the gains of income increases and every government scheme aimed to reduce poverty.

“Over 63 million persons are faced with poverty every year due to healthcare costs alone. It is because there is no financial protection for the vast majority of healthcare needs,” says the draft put out by the Health Ministry on its website for inviting public suggestions.

Healthcare costs are more impoverishing than ever before and almost all hospitalisation even in public hospitals leads to catastrophic health expenditures, it says.

In 2011-12, the draft says, the share of ‘out of pocket’ expenditure on healthcare as a proportion of total household monthly per capita expenditure was 6.9 per cent in rural areas and 5.5 per cent in urban areas.

“This led to an increasing number of households facing catastrophic expenditures due to health costs (18 per cent of all households in 2011-12 as compared to 15 per cent in 2004-05),” it said.
India needs a new health policy that is responsive to these contextual changes, it says while citing rising burden of non-communicable diseases and rapidly-growing health care industry as other reasons for framing a new health policy.