Healing People, Part I: India on less than $30 a Year

MUMBAI, India—Shanta had a good life for a working class woman in Mumbai. Her husband Manoj was a watchman in a factory compound in a western suburb, and they lived in a room with running water, free electricity, even firewood for cooking. She commuted to work, an hour each way, into south Mumbai, where she cleaned three households. But in 2007, Manoj suffered a stroke, and though they went to a municipal hospital for treatment, they spent thousands of rupees (hundreds of dollars) on prescriptions. Shanta became the sole earner and they continued to spend on local healers. Then, Shanta was hospitalized for a severe bout of falciparum malaria (a virulent strain of the mosquito-borne disease, once limited to northeastern India, but now common in Mumbai). Recently, Manoj fell and broke a hip and required surgery, which cost $426 for subsidized treatment at a municipal hospital. To put that number in perspective, the monthly per capita income for 80 percent of the urban population is less than $42. In Shanta's case, the cost of her husband's hip surgery was four months' wages.

As medical costs rise, hospitalization can send a family to the local money lender, running up debts at exorbitant interest rates. Treatment for a single illness can push them to the brink. During one of her health crises, Shanta borrowed $213 at a 60 percent annual interest rate—money she paid back with a loan from one of her employers. India's annual health care expenditure per capita is $21, an amount the government believes is sufficient for all health care services. However, barely 15 percent of this money comes from federal finances, so people must pay for most health care out of pocket. When a country spends just 1 percent of its GDP on health, as India does, there is an intimate link between its health expenditure and the insecurity of its poor. The uncertainties of wages, housing and nutrition are critical factors that can mean the difference between survival and destitution. More than 450 million people (nearly half the population of India) live below the poverty line and make less than $1.25 per day. Trapped between expensive private services and an inaccessible (and still pricey) public sector, the poor can either seek medical treatment and risk pauperization, or go without.

No Alternatives

Health care is a matter of affordability and accessibility. Spending in India's health sector totals $32 billion, but only 15 percent of this comes from government public health services. The bulk of all money spent on medicine in India goes to private doctors and hospitals, which is encouraged by government policy. Barely 5 percent of Indians have insurance coverage, so the vast majority of this private medical expenditure is paid out of pocket. Hospitals that do receive subsidies from the government are required to provide free or inexpensive treatment to those earning less than $1,066 a year. In reality, these subsidies are rarely available to those who need it most. Indeed, some of the major hospitals have been asked to provide evidence of their reduced-rate treatments, or to explain why they have not fulfilled their legal obligation to provide free or heavily-subsidized care.

When Shanta's husband Manoj broke his hip, they had to find a way to get him to the nearest hospital, an expensive private facility. It was just across the railway tracks from their slum, but the road journey even to the other side of the tracks cost $5. "There they told me they could treat my husband but that it would cost more than we could possibly afford," Shanta says. The nearest government health center didn't have the equipment or the staff to treat him—and they live barely 90 minutes from the heart of India's commercial capital. Eventually the family decided to bring Manoj to a municipal hospital in central Mumbai, but when an ambulance couldn't be found he had to travel for two hours by autorickshaw. It cost them $21, about 20 percent of Shanta's monthly income.

The...