Despite a substantial increase in the coverage of health insurance or financing schemes that only cover inpatient treatment between 2017-18 and 2025, out-of-pocket expenditure (OOPE) by patients and their families still accounts for almost all spending on hospitalisation. This was revealed in the latest household consumption survey on health conducted by the National Statistical Office (NSO) in the January-December 2025 period.
Key Findings from the Survey
In the 2017-18 survey, over 90% of hospitalisation expenses were borne by the patient through household income, savings, borrowings, sale of physical assets, and contributions from friends and relatives. At that time, coverage of government-sponsored health insurance or financing schemes was just 13% in rural areas and 9% in urban India.
In the latest survey, coverage has increased to almost 46% in rural areas and 32% in urban areas. However, OOPE on hospitalisation still accounted for an average of Rs 31,500 per hospitalisation, or almost 95% of the average total spend on each episode in rural areas. In urban India, the average hospitalisation expenditure was almost Rs 47,000, with OOPE of about Rs 39,000, or around 83% of the total.
Cost of Childbirth
A similar pattern is reflected in childbirth costs. The average OOPE per childbirth was almost as much as the average medical expenditure per childbirth. The slightly lower OOPE compared to total medical expenditure for childbirth and hospitalisation in urban India may indicate that health schemes are being utilised better in urban areas.
Rising Medical Expenditure
The average medical expenditure due to hospitalisation has almost doubled between 2017-18 and 2025, with rural India showing a greater increase of 97% compared to 77% in urban areas. Unsurprisingly, hospitalisation in private facilities accounted for a larger jump than in public facilities.
Hospitalisation Rates
Interestingly, the overall hospitalisation rate (cases per 1,000 persons) remained the same at 29 in both surveys. While the rural rate increased from 26 to 29, the urban rate decreased from 34 to 32.
