Over the past few decades, rapid economic growth has allowed millions of Indians to lift themselves out of poverty. But the lack of quality and affordable medical care has meant that millions continue to be deeply vulnerable to health shocks.

A Mint analysis of data from the last National Sample Survey Office health survey conducted in 2013-14 shows that 36 million households incurred health expenses that exceeded the annual per capita consumption of those households. To put the number in perspective, India’s most populous state, Uttar Pradesh, consisted of 33 million households when the last census was conducted in 2011. Rural India accounted for 25 million of the 36 million households, which faced catastrophic health shocks, while urban India accounted for the remaining 11 million. Catastrophic health shock is defined as something that leads to annual expenses greater than the annual per-capita consumption of a household. We use per capita consumption expenditure to assess the extent of health shock rather than the overall household expenditure since household sizes vary across income classes in India.

While the poorest are the most exposed financially to health shocks, even among those who are better-off, a significant proportion face health-related financial shocks.

Among the bottom quintile (poorest 20% based on household consumption expenditure), nearly one in five households witness a health shock that wipes out the annual consumption expenses of at least one member of that household. Among the top quintile, it is about 11%. Nationally, 14.4% households face catastrophic health expenditure, the analysis shows. It is, however, worth noting that these figures are likely to underestimate the true burden of health shocks in the country, given that many families opt not to go for any treatment even when a member faces a life-threatening disease. Many families are simply too poor to contemplate a long-haul hospital stay.

While the exact extent of this phenomenon is not known, there are some clues that one can obtain from the NSSO data. The data show that among India’s elites (or top 5%), most people (98%) receive some kind of medical attention before death. However, when it comes to the bottom quartile (or the bottom 25%), a staggering 39% do not receive any medical attention before death.

Nationally, medical attention was missing in the case of nearly one-third of all deaths. It is likely that most of those deaths warranted some kind of medical attention, and that such attention would have been provided if the households in which these deaths took place were as rich as the top 5%. The absence of a well-functioning public health system and the low penetration of health insurance has created a situation, wherein a significant share of India’s population seem to avoid the formal medical system, lest they face a debilitating financial burden, and land in a debt trap. The high financial burden is also reflected in the extraordinarily high share of out-of-pocket health expenses in the country. Out-of-pocket expenses are high not just in comparison to other large emerging markets, most of which are richer than India, but also in comparison to countries with a per-capita income level similar to that of India.

The crisis in Indian healthcare has meant that health worries are not limited to the elderly. Even among the youth, health tops the list of anxieties. A 2016 survey conducted by the Delhi-based Centre for Studies of Developing Societies and German think tank, Konrad-Adenauer-Stiftung, showed that the top concerns of young voters are their parents’ and their own health. Anxieties regarding health have increased since 2007, when a similar survey was carried out.

A voter survey conducted by the Association for Democratic Reforms based on a larger cross-country sample in 2017 also suggested that healthcare is among the top priorities of Indian voters, with better healthcare facilities ranked second, after jobs among the priorities listed by respondents. The Narendra Modi-led government’s launch of the Ayushman Bharat scheme seems to be an attempt to assuage these anxieties. This is the first of a four-part data journalism series on India’s healthcare challenge. The second part will examine whether a social insurance scheme can address India’s healthcare woes.