Tamil Nadu has the lowest out-of-pocket medical expenditure (OOPME) for hospitalisation, excluding childbirth, in public hospitals among major States in the country. However, the expenditure in private hospitals was higher in both urban and rural areas, placing the State among those with the highest OOPME levels for private hospitalisation, according to the National Sample Survey’s “Household Social Consumption: Health”.

The survey found that the average OOPME for in-patient care in government hospitals (during the last 365 days) in Tamil Nadu was ₹1,357 against the national average of ₹6,631. Across all hospitals (urban and rural), the OOPME was ₹44,535 compared to the national average of ₹34,064.

However, the out-of-pocket spending was higher for patients admitted to charitable and private hospitals. In charitable hospitals, the average OOPME was ₹1,68,697 in rural areas against ₹53,237 in urban areas. In private hospitals, it stood at ₹72,979 in rural areas and ₹75,149 in urban. The average OOPME for hospitalisation in private hospitals stood at ₹74,168, as against the national average of ₹50,508.

T. Sundararaman, former executive director, National Health Systems Resource Centre, said the State had the lowest OOPME for hospitalisation in government hospitals. “It is also low for outpatient care. This means that many persons can cope with hospitalisation expenses, likely without taking loans or borrowing money. That free care in public services is the more efficient way of financial protection. But OOPME in private hospitals is one of the highest in the country, in fact, higher than the national average. It shows the complete rise in medical inflation and the minimal benefits from insurance when it comes to private providers,” he said.

K. Kolandasamy, former Director of Public Health and Preventive Medicine, said that in Tamil Nadu’s public hospitals, the expenditure is low as almost all services, except CT and MRI, are free. “In many other States, private pharmacies function inside government hospitals. So, patients bear the drug costs,” he said.

The OOPME is high in private hospitals due to increased availability of services, prevailing market rates and economic status of people. The influence of insurance on the movement to private hospitals may also be studied, he said.

Insurance coverage

Prof. Sundararaman, who was also the chairman of the Advisory Committee of Chief Minister’s Comprehensive Health Insurance Scheme (CMCHIS), delved into insurance coverage. “First, the CMCHIS must be used to ensure adequate funding across the public healthcare system, but no one should be excluded for lack of a card. Patients without insurance cards must be enrolled on the spot, and cardholders should not face procedural bottlenecks in accessing treatment at government hospitals,” he said.

Attention must also be paid to distress migration for healthcare due to non-availability of care, he said. “Such rationing often compounds exclusion due to absence of insurance coverage, forcing patients, particularly those from the lowest income quintiles, to seek care in the private sector. This remains a significant concern. Nobody should be denied CMCHIS benefits due to procedural lapses,” he said.

He said the public healthcare system must function as the primary gate-keeping mechanism. “If patients are referred to private hospitals, the government must ensure reimbursement,” he said.  When patients from the lowest income quintiles are compelled to seek care in the private sector, it suggests that rationing capacity of the public system has been exceeded. Informal rationing also occurs when patients lack coverage under CMCHIS,” he said.

Dr. Kolandasamy said that if certain gaps are addressed, OOPME in public hospitals could decline further. “Strengthening of laboratory services is essential, while the outsourcing of certain services has also increased out-of-pocket payments, including tips paid to workers. There is also a need to establish urban health clinics with evening outpatient services to enable daily wage workers to access healthcare in the public sector. Many of them go to private facilities as of now,” he added.