When 'Health' Ran into 'Demonetisation'

Published: January 17, 2017 - 12:35 Updated: August 8, 2017 - 14:58

It will be a long time before we can uncover the hidden death toll and systemic problems that resulted from poor access to healthcare caused by demonetisation

 Abeer Kapoor & Shibu Kumar Tripathi

ON NOVEMBER 8, 2016, when Prime Minister Narendra Modi announced his government’s move to demonetise currency notes of `500 and 1000, little did the families of ailing patients, encroaching the courtyards and corridors of hospitals across the country know that their lives were hurtling towards utter pandemonium. Like a well-trained pugilist who knows exactly where to punch, demonetisation struck a body blow to the already-tottering healthcare system in India. It is common knowledge that there are many patients who desperately need medical attention but are denied this due to poverty and absence of healthcare facilities in nearby vicinities. We should bear in mind that, according to the National Sample Survey data, 70 percent of health spending in India is out-of-pocket, of which more than half is on medicines alone. Rural indebtedness is exacerbated by disease and illness. Demonetisation has worsened this issue by causing two problematic side-effects: one, the number of patients who can’t afford treatment is on the rise, and two, the quantum of patients who would travel from rural to urban areas to avail of healthcare treatment has gone down substantially. Before demonetisation the lack of reliable healthcare services in the public sector and a lack of health insurance compelled the poor to spend heavily on private medical care. This expenditure was usually financed by taking on considerable debt which aggravated their poverty.

Post-demonetisation there has been a seismic drop in the number of patients as well as the billing of private medical establishments. The fall in footfalls in private hospitals does not mean that a large number of patients have shifted en masse` to government hospitals. On the contrary it means that many patients have simply deferred or delayed medical treatment.
Hardnews travelled to medical establishments across North India to assess the impact of the cash crunch on the healthcare system. What we found leads us to believe that the number of deaths due to poor access to healthcare post-demonetisation is definitely much higher than what is being reported by most media outlets. Preaching patience and the benefits of going cashless to an impoverished person struggling to get cancer treatment might be borderline apathetic and yet it is cases like these which have been left out of the spotlight.


 New Delhi

Since November 8, 2016, the visual dyspepsia that greeted one’s arrival at any Delhi hospital has mutated into a silent, forlorn sedateness. Though emergency services in most of Delhi’s hospitals remain functional, it is the out-patient-departments (OPDs) that wear a deserted and ghostly look. Most OPDs have registered a steady decline in follow-up patients as many of them, according to doctors, are self-medicating or deferring treatment for ailments which are not life-threatening. Take the case of Sahibul Hussain, an office boy suffering from amoebiasis. We met Hussain in an agitated state of mind outside a medical shop opposite AIIMS. In great discomfort, Hussain was quite outspoken about demonetisation and how it has made him choose between getting an opinion from a qualified medical practitioner and spending on essentials like daily rations even when he has money in his hand. For now, he is self-medicating and hoping that the medicine that the chemist gave him will work. For people like Hussain demonetisation has left them between binaries: either shift to government hospitals or be forced to stand in long bank queues to get the required money for treatment. This trade-off hasn’t boded well for private medical establishments. Doctors in Delhi’s private hospitals estimate that there is a 50-60 percent reduction in footfalls at OPDs since November 8. In fact the impact of the cash crunch is felt all around. Dr Ajit Gaba, Medical Director of Delhi’s Aakash Hospital, said, “We have billing of our OPD and surgery departments nosediving. Routine patients and those availing of the wellness packages are also reluctant to show up.”

Medical experts indicate that the note ban has the severest impact on patients coming from economically weaker backgrounds. There are reports of patients and their relatives coming to fisticuffs over hospitals refusing to accept cash payments in old currency notes.

Another issue that has come to the fore is the rapid drop in nutrition levels.  As poor households across the city cut down on essential nutrition to deal with the cash crisis, they become more vulnerable to illnesses, treating which could further aggravate their precarious financial situation

An unintended consequence of demonetisation is the spike in patients availing of health insurance. Dr Vijay Hangloo of Batra Hospital said, “Most of the patients who have gone through surgeries are covered by insurance.” Dr Anuj Malhotra of BLK Hospital told Hardnews, “In the last one month I have operated on over 40 cases, out of which 36 patients were either covered through CGHS or other such corporate insurance policies, merely four of them paid through cash or through cheques.” He added, “Today there is a need to make health insurance mandatory in India just like vehicle insurance is mandatory for everyone.” This is definitely the need of the hour. Only 23 percent of households in the country are covered under any form of health insurance, with more than 80 percent of the poorest households uninsured.

Another issue that has come to the fore is the rapid drop in nutrition levels.  As poor households across the city cut down on essential nutrition to deal with the cash crisis, they become more vulnerable to illnesses, treating which could further aggravate their precarious financial situation. Take the case of Gulu Mohanty, an industrial plumber employed with a small-time plastic manufacturing unit. Post -demonetisation he was laid-off. Ever since, his family, which lives in a one- room house in Sangam Vihar, has stopped purchasing essential rations and switched to eating onion and chapathis three times a day. One week into this diet, his son developed a severe case of pneumonia. The attending physician said that the poor diet had a severe impact on the son’s immunity.

While the healthcare scenario in Delhi is still reeling from the cash-freeze, the situation in rural and semiurbanareas is far worse. 



Baraut is a small town located in Baghpat district of Western Uttar Pradesh. It is here that a grim struggle for survival is playing out far away from the glare of the metro-obsessed media houses. Tauhid Haji Ehsan,58, has been suffering from cardiac disease for the past couple of years. A bypass surgery costs `2.5 lakh in the nearest multi-speciality hospital.  Ehsan was hoping to get his surgery done now that the local sugar mills had released the payment for the crop that he sold to them.

Demonetisation, however, has pulled the rug from under his feet. Ehsan says, “I have to undergo heart surgery or else I will not live much longer. The payment from sugar mills that was pending for over 13 months has just begun to trickle in, but the note ban has ensured that I have no option but to wait. These days all I do is stand in long bank queues. Bahut bure din aa gaye hain (these are very bad days), even doctors or hospital staff are not helping.”

There are many others who share a plight similar to that of Ehsan. Due to the note ban even primary healthcare has been severely affected. Health services centres have collapsed with many of them starved of funds to source even basic supplies like syringes and swabs.

Baraut has a population of nearly three lakh people. With eight Community Health Centres (CHC), 30 Primary Health Centres (PHC) and just one district hospital, a majority of its population is still dependent on private hospitals and nursing homes. While many in Baghpat believe that the move to demonetise high-value currency notes is worth praising as it has levelled the playing field for both rich and poor, the medical community calls it a ‘disruption’ which has successfully hrown healthcare services 

off- track.

Due to the note ban even primary healthcare has been severely affected. Health services centres have collapsed with many of them starved of funds to source even basic supplies like syringes and swabs.

Most of the members of the medical community in Baraut are watching the crisis unfold with a mix of trepidation and anxiety. Dr Manish Tomar is a laparoscopic surgeon who runs a private clinic in the Nai Mandi area of Baraut. According to him, the number of OPD patients has dropped by a staggering 60 percent. Patients have been deferring treatment, mostly elective surgeries, but it has had an impact on their overall health. Dr Tomar added, “Though conditions have somewhat improved in the last week of December, our OPD which earlier used to see between 35-40 patients every day has gone down to 15-20 patients. A major issue is that people are losing trust in doctors just because we are not accepting payments through cheques due to a growing number of cases of cheques bouncing.” 

The note ban has severely affected farmers whose sole source of income is agriculture. With the reaping of sugarcane produce from farms underway many farmers are deeply anxious about what the future portends. Most of them have limited or no money to sow wheat.

 The repercussions of the cash crunch are clearly visible in the hospitals of the region, perhaps even more than the sowing fields. Dr Anil Jain of Aastha multispeciality hospital, when interviewed by Hardnews, mentioned that at least two people had lost their lives due to the scarcity of cash. According to him two dead people were brought to his hospital whose deaths were entirely preventable. They died while their relatives were standing in ATM queues trying to arrange money for their treatment. 

While the government narrative regarding black money has conveniently mutated into making India a cashless economy, the situation in the areas of Baraut, Malakpur, Chapprauli, Baghpat and neighbouring cities of Meerut and Modinagar has come to a total standstill. 

Despite the inconveniences caused by demonetisation, most of the transactions in hospitals are still being carried out in cash. The primary reason for this is that these are payments for small ailments which are relatively inexpensive. Another reason is the abjectly low awareness among residents of the area about online payments or payment through cards. Both Dr Anil Jain and Dr Arvind Jain of Aastha hospital opined that there has been no major boost in e-payments in the hospital as most people are still transacting in cash. A major grievance of the medical community is the continuous delay in issuing of Point of Sale (PoS) machines to banks. Dr Anil Jain said, “A major prerogative for online transaction is connectivity which is in a very poor state in these areas. When internet connectivity is limited to just 15-20 percent of the populace in the district, how can people start availing of online services instantly?” The severity of the blow that demonetisation has inflicted on the healthcare system of the region could have been curbed if some part of the ailing population had access to insurance. This is in stark contrast to metro cities that are seeing a huge surge in patients insured under numerous wellness packages and corporate health policies. According to Dr Tomar, there is a very small number of insured patients in the areas of Baghpat, Baraut and adjoining Meerut. He said, “People in Baraut are clueless about these wellness packages and even the small nursing homes are such that they have no packages to offer. Therefore patients in this region are largely dependent on cash for getting treatment and medications. There are rarely any cases in our OPD when a patient tells us that he or she is insured under some health scheme or policy.” 

The situation in government hospitals is worse than private hospitals. CHCs and PHCs in Baghpat have seen a steep decline in the number of patients. Subah Singh, 84, and his wife Kedari Devi recently visited the CHC at Kutana road in the city only to find out that it was closed. Dispirited by the effects of demonetisation, Subah Singh said, “hum Modi se bilkul khush nahi hain, agar kuch achaa kiya hota to khush hote (we are not at all happy with Modi, had he done something good we would be happy).” The sugar mill to which he supplied sugarcane had recently cleared his dues from 2015. The money had been credited to his bank account, but due to a lack of cash in the ATMs and banks in his locality he was unable to withdraw the amount required to continue farming. 

Dr Dharmendra Vaidyavan, who was in the emergency ward of the CHC where Subah Singh had come, said rather pessimistically, “Doctors are not willing to work in these areas as the hospital is on the outskirts of the city and they have security concerns due to crime in this region.” The CHC, one of eight in the region, has three female and six male doctors. 

Though the situation seems to be improving in cities, the long queues at banks in these areas are still unending. People informed Hardnews that nearly 300-400 tokens are distributed in the morning hours at almost every bank branch, which are then cashed either by the end of the day or the next day. 

Similar problems are also being witnessed in the areas of Meerut and Modinagar which border Delhi. Dr JP Sharma, former Chief Medical Officer (CMO) of Baghpat, who is now practising in Meerut said that demonetisation has had an adverse impact on the health of the public in general. The downslide in purchasing power of the people is directly affecting their health as they have reduced the dosage of medicines compared to the ideal dose prescribed by doctors. He urged the doctors to attend to patients in this ‘desperate’ time even if the patients have no money.  Demonetisation which had been primarily aimed at unearthing hoarded money throughout the country has affected people like Tauhid Ehsan and Subah Singh who have no option but to wait and hope for conditions to become normal and continue their grim struggle for survival. The narrative remained unchanged when we travelled to Kanpur.




In Kanpur’s Regency Hospital, an imposing looking limestone coloured building, Mohammed Irfan’s family sits perched on moulded black chairs that line the long, bustling corridors of the hospital. Each of the four members of his family is frenetically counting the notes in a thick wad of cash, scared that if they don’t deposit the required money, the patient whose health was already in a critical condition, would be evicted from his hospital bed. On December 26, the young man suddenly began bleeding from his mouth after a vein in his body burst. Even though he was losing blood fast they managed to cover the 40 kilometres from Kanpur Dehat where Irfan sells vegetables to the nearest hospital. The next few days were to be nightmarish ones for the family as he was shunted from hospital to hospital in desperate need for emergency care. Their stay in Regency Hospital’s Intensive Care Unit (ICU) has saddled them with a bill of `80,000 that the family can ill afford. When probed about the state of affairs, Irfan’s mother breaks into loud sobs, “This is the fifth hospital that we have come to, all the doctors before this have refused. Where will we get the money from? We have no support, no one is lending money.” Demonetisation has made their lives and those of thousands of others, a living hell: healthcare facilities that were already difficult to access have become near impossible to gain access to. 

Kanpur City is a catchment area for the steady flow of patients from the five-six rural districts that surround it. Hamirpur, Kanpur Dehat, Kannauj and Jalaun all rely on the abundance of small or big hospitals in the city. According to many who throng these hospitals, their home districts don’t have competent medical institutions, which forces thousands of patients to trek hundreds of kilometres to the city. The medical college here and the boom of private healthcare facilities have helped the city absorb the influx of medical treatment seekers. Every street and road has a private clinic or health centre that promises people treatment with large boards advertising their affiliation to the Central Government Health Scheme (CGHS).

Before Irfan was brought to Regency his family went to four hospitals. One amongst them was the Dr. Murari Lal Institute for Chest Disease, a government hospital, where the family took the patient, but couldn’t get access. “It was overcrowded, and only those with contacts in the administration can get access to the beds,” said Irfan’s sister. 

With a limited number of beds in the government hospital, not everyone is lucky to get care in time. Other hospitals would not even let them enter or admit the patient till they saw the money. The same money that had provided them cover in times of distress, buffering them from any financial calamity, has been taken away. 

Private hospitals all over the city have been reeling from the effects of demonetisation. The transition to cashless for many took some time, and they lost out on patients in the intermittent period but once they were able to transition they began taking payment through cheques and Paytm as well. However, with the already strained public health system, the destitute who have not transitioned to digital payments will suffer. In hospitals like Regency, which has five branches in Kanpur alone, people have deferred their operations and procedures till the cash crunch normalises. 

Many are forced to sell their land, but there are no buyers given the cash freeze and, as a result, they now have no ready cash to pay for their treatments. 

While Paytm splurges on yet another ad urging people to adopt its mobile-based e-wallet, somewhere out there a destitute man with a terminal illness but without a smartphone is contending with the onerous task of arranging enough money to travel to the nearest hospital. 

India has one of the highest disease burdens in the world. Many more die of preventable diseases in India than in other countries. Cleansing the system should not come at the cost of preventable deaths.

Abeer Kapoor is a reporter, data visualiser and his interests are agrarian issues, politics and foreign policy. He has a masters in development studies and loves food

Read more stories by Abeer Kapoor

This story is from print issue of HardNews