Illness to poverty in India: a qualitative exploration of hardship financing for healthcare

In India, regardless of the government’s efforts to control health expenditures, people face large out-of-pocket expenditures (OOPE) for medical bills. Thus, people rely on hardship financing practices such as borrowing or selling to meet their health needs. The southern state of Kerala leads India in a demographic transition, resulting in a lower demographic dividend and an increased older adult population. In this context, we aim to understand how financial shocks from illnesses impact poor households in the Pathanamthitta district of Kerala. The present study seeks to investigate the effectiveness of public hospitals and current government insurance schemes in combating health expenditures, identify the hardship financing strategies households use to mitigate health spending and understand the consequences of hardship financing. 50 in-depth interviews and 5 key informant interviews were conducted across 6 grama panchayats and 1 municipality in the district, and a thematic analysis was used to analyse the data. The findings demonstrate the inability of the existing insurance schemes and public health facilities to provide health care without financially and emotionally draining the people. We find that the strategies to attenuate health costs often start with borrowing and transition to selling assets once the poverty deepens. The study urges policymakers to address the issue of large OOPE on drugs. It also displays the aftereffects of hardship financing-decreased household consumption, and foregone care. The study highlights the need for policy initiatives that provide financial protection against illness as well as social security and welfare assistance to mitigate the existing socio-economic damages from the lack of financial protection.