Health Insurance as a Tool for Selecting Private Hospitalization and Mitigating Financial Burden in India: An Analysis of National Sample Survey Data

This study aims to investigate the association between having health insurance and the choice of hospitalization (public or private) and examine the crucial factors influencing this decision. Furthermore, this study also explores the role of health insurance in mitigating the economic burden. This study uses nationally representative data (India) on morbidity and health care from the 75th (2017–2018) round of the National Sample Survey. Descriptive statistics, tobit regression, and logistic regression analysis are performed. The results indicate that out-of-pocket expenditure (OOPE) is generally higher among individuals who receive treatment at private hospitals (₹29,896), are aged 80 years or above (₹27,993), belong to the richer socio-economic strata (₹22,377), reside in urban areas (₹23,135), and have non-communicable diseases (NCDs) (₹29,770). The enrolment of private or government health insurance does not impact the duration of hospitalization. The logistic regression results indicate that having private (odds: 0.35, CI: 0.32–0.40) and government (odds: 0.74, CI: 0.70–0.78) health insurance has a negative association with catastrophic health expenditure (CHE). Private health insurance led to a nearly 3.8-fold increase in the likelihood of opting for private hospitalization compared to individuals without insurance. However, private hospitalization was accompanied by 8.5 times higher CHE than government hospitalization. The early detection and treatment initiation could be delivered through the Primary Health Center (PHC). India has a vast network of PHCs, and the PHCs should be upgraded adequately with diagnostic and treatment facilities to detect and treat chronic conditions to help reduce the private hospitalization and duration of hospitalization, which will help to reduce the economic burden.