Health financing in India is largely private. Public spending accounts for only 28.6 per cent of the total health expenditures (states and central government combined).
Households incur about 67.7% which translate to about 5.7% of household incomes. Since medicines, diagnostics and ambulatory care are estimated to constitute 70% of this payment, it is estimated that if all outpatient treatment could be provided for free, then only 0.5% people will sink into poverty due to health expenditures.
In patient treatment and hospitalisation are estimated to account for about 32% of out-of-pocket expenses. Expenditures that account for more than 40% of non-food spending of household expenses are considered as catastrophic. An estimated 14% of Indian households face this situation. Due to the extensive market failures, government intervention seems inevitable in order to ensure equity and social stability.
Given below are two statements: One is labelled as Assertion (A) and the other is labelled as Reason (R).
Assertion (A): Impoverishment of the households due to out of pocket health care expenditure is high in India.
Reason (R) : Health financing in India is largely private, where individual pay to seek health care.
In the light of the above statements, choose the correct answer from the options given below:
