April 09, 2012 05:08 ET

High Out-of-Pocket Expenditure of 78% Limits Indian Healthcare Spending

ROCKVILLE, MD--(Marketwire - Apr 9, 2012) - has announced the addition of the new report "Pricing and Reimbursement of the Healthcare System in India - Low Levels of Drug Reimbursement Lead to a High Out-Of-Pocket Expenditure" to their collection of Insurance & Managed Care market reports. For more information, visit:

GBI Research, the leading business intelligence provider, has released its latest research "Pricing and Reimbursement of the Healthcare System in India - Low Levels of Drug Reimbursement Lead to a High Out-Of-Pocket Expenditure." It provides a comprehensive overview of the healthcare system, and pricing and reimbursement process in India with a detailed analysis of the different regulatory mechanisms used in India. The report closely scrutinizes the major changes in pharmaceuticals-related pricing and reimbursement in the recent past, and the impact these changes will have in the future. The health insurance is responsible for facilitating demand by making high-cost prescription drugs more affordable. Although the per capita income is rising in India, the modest income of most of the population keeps the high cost drugs and medicines out of reach of the majority of the population. Drugs would become more expensive with the enforcement of product patents and so the sales of the expensive drugs depend on the growth and the maturity of the health insurance sector. If the health insurance industry does not mature, the market for patented drugs would experience adverse effects. The next three to five years will see a significant growth and change in the Indian health insurance industry as new insurance players and insurance products respond to the increased demand.

India has a dual system of care: a private fee-for-service based sector where the money is paid Out-Of-Pocket (OOP) by individual households and a tax-based public sector where the providers are salaried. The utilization of insurance under both these systems is partly restricted by the affordability of the individual household and availability of the budget. On the other hand, insurance, as a means of financing, is a far more sophisticated mechanism, requiring a comprehensive understanding of the failures that characterize health insurance markets. Despite the improving health status of the Indian population, healthcare infrastructure in India is far from achieving 100% quality, technology and superior healthcare delivery systems. While the Central Government is limited to family welfare and disease control programs, the state governments are responsible for primary and secondary medical care, with a limited role in specialty care. Looking at the healthcare indicators and the growing prevalence of non-communicable lifestyle-related diseases, both the government and private sector realize the need to meet this basic demand. Today, the private sector provides 80 percent of the healthcare service.

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