India Cuts Healthcare Burden as Out-of-Pocket Costs Drop Sharply

India’s healthcare financing landscape has undergone a significant shift over the past decade, with the government claiming a substantial reduction in out-of-pocket expenditure (OOPE) the amount citizens pay directly from their own pockets for treatment. Union Health Minister J. P. Nadda , speaking at the convocation ceremony of Swami Rama Himalayan University in Dehradun, highlighted that this decline has eased the financial burden on households, particularly among economically vulnerable sections.

National Health Accounts data supports this trend. Household spending on healthcare has fallen from roughly 64% of total health expenditure in 2013–14 to about 39% in 2021–22 , a drop of nearly 25 percentage points. In practical terms, families that once paid ₹64 out of every ₹100 spent on healthcare now pay about ₹39. This reduction is widely viewed as one of the most significant improvements in India’s health financing structure.

A major driver behind this shift has been the expansion of financial protection schemes and increased public health spending. Government expenditure on healthcare has steadily risen, while initiatives such as Ayushman Bharat–Pradhan Mantri Jan Arogya Yojana (PM-JAY) provide health insurance coverage of ₹5 lakh per family for the country’s poorest 40%. The scheme now reaches nearly 62 crore beneficiaries , improving access to hospital care and reducing the risk of catastrophic medical expenses. Free medicines, diagnostics, and expanded public hospital services have also contributed to lowering household costs.

Infrastructure and service delivery improvements have reinforced these gains. The number of AIIMS institutions has grown from 6 to 23 , expanding tertiary care access nationwide. Meanwhile, more than 1.82 lakh Ayushman Arogya Mandirs serve as the first point of contact for primary healthcare, helping detect illnesses early and reduce costly hospitalizations. Institutional deliveries have risen to nearly 89% , while maternal and infant mortality rates have declined, reflecting strengthened maternal and child healthcare systems.

India has also recorded progress in controlling major diseases. Sustained vector-borne disease programmes have reduced malaria incidence and mortality, while tuberculosis control efforts have accelerated declines in TB incidence compared with global averages. The country’s administration of over 220 crore COVID-19 vaccine doses demonstrated the scale and resilience of its public health infrastructure.

For ordinary citizens, the reduction in OOPE means fewer families are forced to borrow money, sell assets, or fall into poverty due to hospital bills. Insurance coverage and public healthcare access now cushion major medical expenses, particularly for poorer households. However, challenges remain. Outpatient care, medicines, and diagnostics still account for a large share of household spending, and reliance on private healthcare continues to keep costs high for many middle-class families.

Despite these gaps, the broader trajectory points toward improved financial protection and expanded healthcare access. The decline in out-of-pocket spending, combined with improved health outcomes and infrastructure growth, signals progress toward universal health coverage. Experts caution that sustained investment, stronger primary care, and wider coverage of outpatient services will be crucial to ensure affordable healthcare for all.