Implications of Age Structural Transition on Future Healthcare Spending in India

Preeti Dhillon, United Nations Population Fund (UNFPA)
Laishram Ladusingh, International Institute for Population Sciences (IIPS)

This study sheds height on implication of changing demographics, particularly of gradual population ageing in India on burden of healthcare expenditure (HCE) as share of the gross domestic product (GDP). The key contribution of paper is estimating the age patterns of HCE by integrating inpatient and outpatient costs from the unit level data of National Sample Survey and linking these with trend in aggregate level HCE from the National Account Statistics and projected population from the United Nations. Finally, we examine the population ageing effects on future HCE. Findings reveal that the growth of age-compositional index on HCE shall increase from 0.5% in 2005 to 0.8% in 2025 and shall stagnant afterwards. However, age-compositional effect on GDP may drop from 0.6% to 0.4% during the same period. The findings of the study are crucial for evolving a sustainable healthcare support system in view of the impending population ageing in India.