Tamil Nadu has the lowest out-of-pocket medical expenditure (OOPME) for hospitalization, excluding childbirth, in public hospitals among the major states in the country. However, private hospital spending was higher in both urban and rural areas, ranking the state among the countries with the highest OOPME level for private hospitalization according to the national sample survey “Household Social Consumption: Health”.
The survey found that the average OOPME for inpatient care in government hospitals (during the last 365 days) in Tamil Nadu was ₹1,357 against the national average of ₹6,631. In all hospitals (urban and rural), the OOPME was ₹ 44,535 compared to the national average of ₹ 34,064.
However, out-of-pocket costs were higher for patients admitted to charitable and private hospitals. In charitable hospitals, the average OOPME was ₹ 1,68,697 in rural areas against ₹ 53,237 in urban areas. In private hospitals, it was ₹72,979 in rural areas and ₹75,149 in urban areas. The average OOPME for hospitalization in private hospitals was ₹74,168, against the national average of ₹50,508.
T. Sundararaman, former executive director, National Health Systems Resource Centre, said the state has the lowest OOPME for hospitalization in government hospitals. “It is also low for ambulatory care. This means that many people can cope with the costs of hospitalization, probably without borrowing or borrowing money. Free care in public services is a more effective way of financial protection. But OOPME in private hospitals is one of the highest in the country, in fact higher than the national average. It shows a full increase in health inflation and minimal insurance benefits when it comes to private providers,” he said.
K. Kolandasamy, former Director of Public Health and Preventive Medicine, said that expenditure is low in Tamil Nadu public hospitals as almost all services, except CT and MRI, are free. “In many other states, private pharmacies operate inside government hospitals. So the cost of the drugs is borne by the patients,” he said.
OOPME is high in private hospitals due to increased availability of services, prevailing market rates and economic status of people. The effect of insurance on shifting to private hospitals can also be explored, he said.
Insurance coverage
Prof. Sundararaman, who was also the chairman of the Advisory Committee for the Chief Minister’s Comprehensive Health Insurance Scheme (CMCHIS), delved into insurance coverage. “First, CMCHIS must be used to ensure sufficient funding throughout the public health system, but no one should be excluded for lack of a card. Patients without an insurance card must be enrolled on the spot, and card holders should not face procedural obstacles in accessing treatment in government hospitals,” he said.
Attention should also be paid to emergency migration to healthcare due to the unavailability of care, he said. “Such allocation often increases exclusion due to lack of insurance coverage, forcing patients, especially those in the lowest income quintiles, to seek care in the private sector. This remains a significant problem. No one should be denied CMCHIS benefits due to procedural errors,” he said.
He said the public health system must act as the primary gatekeeping mechanism. “If patients are referred to private hospitals, the government must ensure reimbursement,” he said. When patients from the lowest income quintiles are forced to seek care in the private sector, it suggests that the allocation capacity of the public system has been exceeded. Informal allocation also occurs when patients lack coverage under CMCHIS,” he said.
Dr. Kolandasamy said that if certain loopholes are addressed, OOPME in public hospitals could further decline. “Strengthening of laboratory services is necessary, while outsourcing of some services has also increased pocket money, including gratuity to staff. There is also a need to establish city health clinics with evening outpatient services to enable daily wage workers to access healthcare in the public sector. Many of them are already leaving for private facilities,” he added.
Published – 10 May 2026 0:33 IST
