Do the Poor Benefit from Public Spending on Healthcare in India? Results from Benefit (Utilisation) Incidence Analysis in Tamil Nadu and Orissa

Acharya D, Vaidyanathan G, Muraleedharan VR, Dheenadayalan DS and Dash U , 2011

This study addresses a set of related questions in public policy: How well are we spending the public resources on health care? Are the benefits of public spending reaching the poor? Is public spending on health care becoming more or less pro-poor over time? What factors might be contributing to the pro-­poor or pro-­rich nature of public spending and their distributions? The present study is motivated by these questions and attempts to provide evidence from the states of Tamil Nadu and Orissa over the period 1995 to 2004. The study employs the data sets of the National Sample Surveys (NSS) carried out in 1995-­96 and 2004 and a modified version of the methodology of BIA and Decomposition Analysis (DA) to answer the above research questions. Overall, the study has provided many insights into the pattern of utilisation of public facilities (for in-patient, out-patient and maternity services) in rural and urban areas of Tamil Nadu and Orissa.

Two broad and definitive findings of this study are: (1) Public spending on healthcare in Tamil Nadu has become much more pro-­poor by 2004-05 than it was a decade earlier (1995-96). This true of all three services considered in this study; (2) Public spending on health care in Orissa has become more pro-poor for out-­patient services, but continues to be pro-rich (although to a much lesser extent) for in-­patient and maternity services over the same period. The study identifies a number of factors that might have brought about these changes: (a) the increased presence or absence of private sector (b) choice of women in lower quintiles for institutional deliveries and for public institutions and (c) improved supply side changes in public facilities as in Tamil Nadu.

The study has some important policy implications. Most importantly, it demonstrates the utility of UIA and DA in carrying out policy analyses of public financing in healthcare. Such studies should be conducted more regularly and periodically at sub-regional and district levels, at various levels of facility and types of services. This will help district health/programme managers in assessing their performance and identify measures to improve over a period of time.

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