The first set of analysis examined the differences in hospital utilization by health insurance status of the poor individuals. There are two aspects of hospital utilization – incidence of hospitalization and duration of hospitalization. The incidence indicates need and/or willingness to get admitted into a hospital. Decision to become hospitalized is often not made by the patients; in most cases, individuals follow the instructions of physicians and other health care providers. Recommendation by health care providers is the triggering factor for being admitted in hospitals but some individuals may decide not to seek care from hospitals due to other barriers even though the hospitalization may be considered medically necessary. Once the patients decide to get admitted in the hospital, the length of stay is most likely determined by the health care providers and hospital managers.
The empirical results imply that the poor individuals enrolled in health insurance program are more likely to get admitted in a hospital than those who are not covered by health insurance. Incidence of hospitalization is a reflection of access to inpatient hospital services and it is not surprising to find that having insurance increases the likelihood of hospitalization. Even though the regression models, strictly speaking, do not show causal relationship, in this case it probably indicates causal pathway. Enrollment in insurance happens before utilization of hospital services and there exists no mechanism of obtaining insurance because of need for hospitalization. Therefore, only reasonable implication of the result would be that having insurance for inpatient services increases the incidence of hospitalization among poor individuals in India.
The second aspect of hospital service use is the intensity of service utilization after the patients are admitted. The empirical model indicates that insurance status had no relationship on the level of utilization of hospital services, measured by the length of stay. Again, most logical explanation would be that if insurance status has any relationship with duration of stay, the causal relationship should be from insurance status to duration, not the other way round. Since insurance status had no effect on duration of hospital stay, health care providers did not discriminate between insured and uninsured once they are admitted in the hospitals. Again, this is not surprising for a number of reasons. The coverage limits in the health insurance programs for the poor is low and this low coverage limits did not create any incentive for increasing the duration of hospitalizations by the physician. The other reason may be that physicians are driven by the intrinsic motivation to provide better care for the patients, irrespective of their health insurance coverage or their capacity to pay. There is always the possibility that the clinicians are unaware of the insurance status of the patient, which are usually handled by the administrative divisions of the hospitals, and thus their clinical decisions are independent of any health insurance enrolment status.
Apart from the insurance status of individuals, a number of other factors affect hospitalization and hospital duration. Chronic illnesses increase both the incidence and duration of hospitalization. Early detection by preventive screenings and early treatment initiation will help in decreasing disease progression, and thus reduce preventable hospitalizations to a large extent. This early detection and treatment initiation could be delivered through the PHC system in India. India has a wide network of PHCs and the PHCs should be upgraded adequately with diagnostic and treatment facilities to detect and treat chronic diseases which will help in reducing hospital rates, the duration of hospitalizations, and the associated higher OOP healthcare costs for inpatient care. Many chronic diseases can be treated effectively in the ambulatory setting. Thus, better approaches to manage the chronic diseases in the outpatient settings must be implemented nationally to reduce hospitalizations for conditions that could be treated in the outpatient setting.
Lower incidence of hospitalization is seen among the larger households. The insurance for the poor may not cover all individuals in the household. In some states of India, enrollment is limited to five members of household and the five members must be selected at enrollment. Therefore, for large households, many members may not be covered by the program even though the household is enrolled in the insurance plan. Lack of insurance coverage of some members may prevent access and service usage by those non-covered members. Since the non-covered members cannot utilize the healthcare delivery system for their health needs, they may end up showing lower rates of hospitalizations. This barrier in using the hospitals may adversely affect the health status of patients and overall health status of members in larger households may suffer. Thus, removing these enrolment restrictions will be helpful in improving hospital utilizations especially for the members of the larger households.
Our study shows that the Scheduled tribes in India have lower duration of hospitalization. Scheduled tribes have been traditionally neglected in the country who have lower capacity to pay because of their limited employment opportunities in the formal sector, lack of access to cash, and their area of residence which is mostly located in the hilly and remote tribal areas of India. They also have poor access to healthcare facilities since they live far away from the nearest health facility (52). In addition to this, the enrolment of tribal people in the health insurance programs for the poor is also quite low, both because of the presence of access barriers to reach them and enroll them under insurance programs, and of the problem of acceptability with some of the tribal groups who actively try to avoid participation in any governmental programs. Access barriers should be reduced for the Scheduled tribes and their enrolment in health insurance programs needs to be improved. Government should initiate outreach program to reach this hard-to-reach group so that their enrollment in insurance program can be expanded.
Both men and women who are 40 years or older have higher incidence of hospitalizations. This is expected since there is a declining stock of health capital with age and the severity of illness may also increase with age requiring higher number of hospitalizations. However, only women in the age groups of 19 to 40 years have higher incidence of hospitalizations, while men in the same group do not have higher incidence of hospitalizations. The main reason for this may be that women in the reproductive age group of 19 to 40 years have higher hospital admissions related to childbirth in healthcare institutions. In order to have safe deliveries, the Government of India promotes institutional deliveries through the Janani Suraksha Yojana (JSY) conditional cash transfer scheme, which may explain higher hospitalizations among women in the reproductive age group.
Utilization of private hospitals have higher OOP health expenditures. Utilization of private hospitals is not a problem if the richer households are using the private hospitals to get access to better quality services, but when the poor households obtain care from private hospitals, out-of-pocket expenses may become too high for the poor households to afford. The poor households need to be protected from the high OOP health expenditures when they are forced to use private hospitals. If the poor households needing hospital services do not have access to governmental facilities, they may decide to seek care from private hospitals.
The private healthcare system in India is highly unregulated. Regulation of private sector can be done by fixing prices for different diagnosis groups so that households would become fully aware of the total hospital bill for the medical condition at the time of utilization of services. Making the charges of hospitals more transparent will be another way of protecting households from uncertainty related to hospital service expenses. The government sector hospitals act as an important source of healthcare delivery in India, especially for the poor people. Many poor people do not use the government healthcare facilities because of their perceived low quality, poor infrastructure, absences of health care providers and significant travel distances. Strengthening of government health facilities with better infrastructure and facilities is needed. Reducing access barriers to help the poor to reach the public health facilities should be done in order to protect the poor households from making high OOP health expenditures at private sector hospitals.
Increased duration of hospital stay leads to experiencing higher OOP health expenditures. Duration of hospital stay can be reduced either by reducing the severity of illness, so that people do not have to stay longer in the hospitals or by reducing the cost of services, so that they do not incur higher health expenditures. Increasing health insurance coverage limits and a defined benefit package for different types of medical conditions will also help in reducing the higher OOP health expenditures due to increased hospital stay.
This research finds that specific diseases such as cancers, cardiovascular, endocrine, respiratory, neurological, obstetric and childbirth, and injuries have higher OOP inpatient health expenditures. Specific national health programs can be established to include people affected by these diseases, and also provide them with disease-specific healthcare services. India is currently establishing a national health program for non-communicable diseases which is being piloted in some districts. Faster nation-wide implementation of this program will help the poor individuals suffering from these diseases to get specific health service package. Also, the health insurance coverage limits may be increased for the poor individuals who are suffering from these specific diseases. Increasing coverage limits may also encourage “up coding” of health conditions and without a rigorous monitoring system, disease-specific limits may encourage reporting of high revenue earning health conditions at a higher rate.
Health insurance programs for the poor increase the incidence of hospitalization but has no effect on the duration of hospitalizations and inpatient OOP health expenditures. Presence of chronic illness, belonging to older age groups, women in the reproductive age group, and belonging to a small household have higher hospitalization. People who have higher duration of hospital stay, admitted to a private hospital, using allopathic treatment, having chronic illnesses, having higher level of education and belonging to the middle age group experienced higher OOP inpatient health expenditures. By identifying the groups most affected, this research aids the designers of the national insurance programs to design better benefit packages for those population groups. This investigation will serve as a basis for assessing India’s policy options to reduce financial burden due to OOP health expenditures.