The economic implications of non-communicable disease for India

Type Working Paper - HNP Discussion Paper
Title The economic implications of non-communicable disease for India
Publication (Day/Month/Year) 2010
In 2004, 4.8 million (59.4 percent) of the estimated 8.1 million Indian deaths were due to NCDs. With India’s population aging over time and a higher incidence of NCDs in older age groups, and with evidence emerging that the India’s poor are at heightened risk of acquiring NCDs owing to high rates of smoking and tobacco use, occupational risks, and residential living conditions, a better understanding the economic impact of NCDs becomes urgent.

In 2004, Indians spent nearly INR 846 billion out of pocket on health care expenses, amounting to 3.3 percent of India’s GDP for that year. The share of NCDs in out of pocket health expenses incurred by households increased over time, from 31.6 percent in 1995-96 to 47.3 percent in 2004. More than one-half of the out-of-pocket expenses on health care were incurred on purchases of medicines, diagnostic tests and medical appliances.

The odds of incurring catastrophic hospitalization expenditures are nearly 160 percent higher with cancer than the odds of incurring catastrophic spending when hospitalization is due to a communicable condition. By comparison, the odds of incurring catastrophic hospital spending due to CVD or injuries are about 30 percent greater compared to communicable conditions that result in hospital stays.

In 2004, assuming that all care-givers and sick individuals above the age of 15 years were productive yielded an annual income loss from NCDs of one trillion rupees. More than one-third of all income losses were due to CVD and hypertension.

If NCDs were completely eliminated, the estimated GDP in a year such as 2004, using two different assumptions, would have been 4-10 percent higher. Per capita GDP would also be higher. The primary driver of these results on GDP is the change in life expectancy at birth.

Our analysis suggests that NCDs constitute a significant economic burden on India.

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