Hospitalisation Costs in India: Out-of-Pocket Expenses Remain High Despite Rising Insurance Coverage, says NSO Report

Recent data from the National Statistical Office (NSO) highlights a significant challenge faced by patients in India: the burden of out-of-pocket expenses for hospitalisation.  

Even with increased health insurance coverage, individuals continue to pay a substantial portion of these costs themselves. 

Major Findings from the NSO Health Survey 

The survey revealed that health insurance coverage expanded significantly between 2017-18 and 2025, reaching 46% in rural areas and 32% in urban centres.  

Despite this increase, out-of-pocket expenditure continues to account for the majority of hospitalisation costs. In rural regions, patients spent an average of ₹31,500 per hospitalisation, which constituted approximately 95% of total expenses.  

Urban patients faced hospitalisation costs averaging ₹47,000, with out-of-pocket expenses of around ₹39,000, making up 83% of the total. 

Variation in Costs for Childbirth and Urban Schemes Utilisation 

A similar pattern prevails in childbirth-related expenses. Out-of-pocket spending remains close to overall medical costs, though slightly lower in urban areas. This suggests better utilisation of health schemes in cities. 

Read More: NSO Survey Flags Higher Government Hospital Costs in Poorer States! 

Rising Hospitalisation Expenses and Unchanged Rates 

Over the survey period, hospitalisation costs have nearly doubled, with a 97% increase in rural areas and a 77% increase in urban areas.  

This surge is largely driven by the private healthcare sector. Despite rising costs, the hospitalisation rate remains stable at 29 cases per 1,000 people, with rural rates increasing slightly from 26 to 29, while urban rates dipped from 34 to 32. 

Conclusion 

The NSO survey underscores a critical issue in the healthcare system: despite wider health insurance coverage, patients continue to face significant out-of-pocket expenses for hospitalisation. The consistent rise in healthcare costs, particularly in private facilities, exacerbates this challenge, highlighting the need for more comprehensive policy interventions. 

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