Economic Impact of Ill Health On HouseholdBy –

Dr. Varsha Devlekar

Dr. kavitha Gangam

PRESENTATION OUTLINE

• Ill-health

• What are the direct and indirect costs of illness to households ?

• How do households manage or cope with illness costs ?

• What is the impact of illness costs and coping strategies on household assets , incomes flow and processes of impoverishment ?

• Is there evidence to suggest that health service characteristics exacerbate or mitigate illness costs for poor households ?

“ if main earner of family falls ill then how does it affects the

financial status of that family”

‘‘HEALTH IS A STATE OF COMPLETE PHYSICAL, MENTAL AND SOCIAL WELL BEING AND NOT MERELY ABSENCE

OF DISEASE OR INFIRMITY’’

“ ILL-HEALTH AND POVERTY GOES HAND IN HAND”

It is quite simple that poor are sicker than non poor and this is true in both

rich and poor countries.

ILLNESS

Physiological

Psychological

Social

Acute

Chronic

Psychological Illness

Stress

Depression

Anxiety neurosis

Dementia

Schizophrenia

Personality disorder

How does psychological illness threatens

household economy ?

Sick more leaves

Work accidents

Medical and legal issues

Inability to take proper financial decisions

Amount spent on alcohol , tobacco, drugs etc.

exceeds income

Increase in Chances of physiological illness

PHYSIOLOGICAL ILLNESS

Burning health

problems in

India

Diabetes

CVD

Hypertension

Nuritional

Anaemia

Cataract

Malaria

Dengue

Leprosy T.B.

7 %

%15%16

%51

87 %

%7573 %

40 %

6 %

%10%119 %

0

10

20

30

40

50

60

70

80

90

100

Low Income Lower - Middle

Income

Upper Middle

Income

High Income

Communicable,

maternal,

perinatanal and

Nutritional

conditions

Chronic or non

commuincable

diseases

Injuries

Worldwide share of deaths by causes and World Bank Income Category 2002

Disease Household Cost in INR

• tuberculosis 3500

• Malaria 5000

• AIDS/HIV 50,000

• Cataract 1207

• Leprosy 1,13,000

• COPD 33,000

Annual Income Losses to Households Affected by NCDs in India, 2004 (Mahal et al. 2010)

Based on data from the 60th round (2004) of the National Sample Survey Organization that surveyed

nearly 80 thousand households on health care utilization, expenditure and other information;

combined with mortality data from the Medical Certification of Causes of Death

(MCCD) of the Registrar General of India and the Burden of Disease statistics of the WHO

Economic Burden on household for

poor people is spending more than

10% of total income on health issues

Mean household health expenditure over the wholesample studies done by Mr Steven Russell from School ofDevelopment Studies, United Kingdom is 7.1% .

But 19.4 % for the poorest and 3.9% for richest

3.9% 19.4%

Access, services, quality

insurance

Admission in hospital

Direct and indirect cost

Pre-existing savings

Social networkingAffects lifestyle

Selling assets

HOW DOES THE ECONOMY GET AFFECTED?

1. Direct cost-

• Hospital payments

• Medicines

• Investigations

• Travelling expenses

• Post hospitalization care

2. Indirect cost-

• Cut down in salary

• Prolonged leave

• Decrease in work efficiency

• Unemployment etc.

How to Reduce the Impact Of Ill-health on

Household??

• Assessment of health status and health problems is the 1st requisite for

any planned economy , so the government should provide certain

healthcare policies like health insurance, Medical loans

• Building private and public healthcare partnership

• Providing health education

• Improving the number and qualitative health service in Gov. , semi Gov.

hospitals

• Reducing the custom tax over the imported equipments , drugs.

Health contributes to individual utility or social welfare in three ways.

1. People prefer to be more healthy than less

healthy (i.e. health directly affects utility). In

economic terms, it is an argument in the utility or

social welfare function.

e.g. diet, yoga, gym

2. The enjoyment of consumption of other goods and

services is partly influenced by the level of health (i.e.

marginal utility derived from consumption is partly a function

of health status).

Poverty/ low income

Small size of the market

Low investment

Lack of capital

Low productivity

3. Without good health other economic objectives,

such as producing income that allows people to

consume market goods, stand to be compromised;

in other words, it is instrumental to an individual's or

community's capability to undertake desired

activities or functions