Despite a substantial increase in the coverage of health insurance or finance schemes that cover only in-patient treatment between 2017-18 and 2025, expenditure incurred by patients and their families still accounts for almost all expenditure on hospitalisation. This was revealed in the latest household consumption survey on health conducted by the National Statistical Office (NSO) for the period January-December 2025.In the 2017–18 survey, more than 90% of hospitalization expenses were borne by the patient through household income or savings and borrowings, while much of the remainder was from the sale of physical assets and contributions from friends and relatives. At that time, coverage of government sponsored health insurance or financing schemes was only 13% in rural areas and 9% in urban India.
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The coverage in this survey has increased to about 46% and 32% respectively. However, out-of-pocket expenditure on hospitalization still averages Rs 31,500 per hospitalization or about 95% of the average total expenditure per hospitalization episode in rural areas. In urban India, the average cost of hospitalization was about Rs 47,000 and the average OOPE for hospitalization was about Rs 39,000, or about 83% of the total.A similar pattern is seen in data on the cost of childbirth. The average out-of-pocket expenditure per child birth was almost the same as the average medical expenditure per child birth. The average OOPE appears to be slightly lower than the average medical expenditure for delivery and hospitalization in urban India which may be an indication that health schemes are being better utilized in urban India.Average medical expenditure due to hospitalization is projected to nearly double between 2017-18 and 2025, with the greater increase seen in rural India. The increase was 97% in rural areas compared to 77% in urban areas. Not surprisingly, there has been a larger jump in the number of hospitalizations in private facilities than in public facilities.Interestingly, the overall hospitalization rate (hospitalized cases per 1,000 persons) has remained the same at 29 in the last survey and the latest survey. While the hospitalization rate in rural areas has increased from 26 cases per 1,000 to 29, it has declined from 34 to 32 in urban areas.