Distress financing on inpatient health expenditure across States in India

Background Out-of-pocket (OOP) healthcare expenditures remain a significant burden and are a leading cause of distress financing, particularly among socioeconomically disadvantaged households in India. Despite recent reductions in OOP spending, many families continue to experience financial hardship when seeking inpatient care. The study aims to examine state-level disparities and key socioeconomic determinants influencing reliance on distress financing as a coping strategy. Methods Data from the 75th round (2017-18) National Sample Survey Organization (NSSO), covering 113,823 Indian households, were analyzed. Distress financing was defined as any non-income/savings method used to pay for inpatient care. Logistic regression was conducted to identify key socio-economic and health-related determinants at national and state levels. Results Scheduled Castes (SC) and Scheduled Tribes (ST), as well as households with lower income and education levels, exhibited significantly higher reliance on distress financing. States such as Uttar Pradesh, West Bengal, Maharashtra, and Rajasthan demonstrated the greatest incidence of distress financing, particularly in rural areas. Even among insured households, distress financing persisted, especially in rural settings. Regression analysis identified social group, income quintile, education, occupation, household size, and health insurance coverage as significant predictors of distress financing. Conclusions Distress financing for inpatient healthcare persists as a major challenge in India, despite a downward trend in OOP expenses. The burden is disproportionately higher among vulnerable groups and in states with weaker public healthcare systems. Policymakers should prioritize targeted insurance coverage, health infrastructure strengthening, and need-based financial protection for high-risk groups to reduce the incidence of distress financing and increase equity in healthcare access