HEALTH EXPENDITURE IN INDIA

HEALTH EXPENDITURE IN INDIA

CONTEXT

• National Health Accounts (NHA) reported that the government has increased the expenditure on health, making the decline of Out-Of Pocket Expenditure (OOPE) to 48.8% in 2017-18 from 64.2% in 2013-14.

WHAT ARE THE MAJOR POINTS OF THE REPORT?

• Increasing the government’s share of total GDP — In 2017-18, the government’s health expenditure as a shareof the country’s total GDP (Gross Domestic Product) increased.
  • From 1.15 percent in 2013-14 to 1.35 percent in 2017-18, it has risen.
• Government Spending increases in Per-Capita Terms – Between 2013-14 and 2017-18, the government’s health expenditure climbed from Rs 1,042 to Rs 1,753 per capita.
• Primary Health Care’s Share – Primary healthcare now accounts for 54.7 percent of current government health expenditures, up from 51.1 percent in 2013-14.
  • More than 80% of thecurrent government health expenditure is spent on primary and secondary care.
• Health-related Social Security Expenditure – In addition, the share of social security expenditure on health has increased. Thisincludesthe social health insurance programme, government-funded health insurance schemes, and medical reimbursements to government employees.
• Out-of-pocket spending has decreased – For 2017-18, the increase in government healthcare spending resulted in an increase in the share of government expenditure in overall health expenditure to 40.8 percent and a decrease in out-of-pocket spending to 48.8 percent.
  • The decrease in OOPE can be related to increased use of the government health facilities and lower service costs at these facilities.

WHAT ARE THE ISSUES IN THE HEALTH SECTOR?

• Lack of Primary Healthcare Services – The country’s current public primary health care model is limited.
  • Even in areas where there is a well-functioning public primary health care centre, only pregnancy care, limited childcare, and few services related to national health programmes are available.
• Supply-Side Deficiencies – Inadequate health management skills, as well as a lack of suitable training and supportive supervision for health workers, prohibit the intended quality of health services from being delivered.
  • According to a report published byJohns Hopkins Bloomberg School of Public Health in 2019, roughly one out of every 100 Indian children die before reaching their fifth birthday eitherdue to diarrhoea or pneumonia.
  • Diseases like diarrhoea, polio, and malaria are directly linked to suboptimal access to clean water and sanitation.
• Inadequate funding – In FY 2020-21, India spent 1.8 percent of GDP on health, compared to 1-1.5 percent in previous years. India’s total out-of-pocket expenditure accounts for approximately 2.3 percent of GDP.
  • This is extremely low when compared to the OECD average of 7.6% and other BRICS countries’ average of 3.6 percent in the health sector.
• Overlapping Jurisdiction – There is no single public health authority with the legal authority to issue guidelines and enforce compliance to health standards.
• Sub-optimal Public Health System – As a result, combating Non-Communicable Diseases, which are all about prevention and early detection, is difficult.
  • It reduces readiness and the effective management for new and emerging dangers like the Covid-19 pandemic.
• Less Doctors than required level – India now has one doctor every 1,445 people, compared to the WHO standard of one doctor per 1000 people.

WAY FORWARD

• To reduce costs outside a few islands of excellence, such as AIIMS, investments in other medical colleges should be promoted in order to potentially reduce costs and improve healthcare quality.
• For a faster and more successful achievement of the aim, focus on Public-Private Partnerships (PPP) in other clinical processes and hospitals, as well as using private sector expertise in the vaccination drive.
• Incentivizing R&D (Research and Research) through additional tax deductions, as well as lowering GST (Goods and Services Tax) on life-saving and necessary pharmaceuticals, can help to promote greater expenditures in new drug development.
• It is critical to devote significant attention to training, re-skilling, and knowledge up-gradation in order to prepare the existing healthcare personnel to supply the intended healthcare facilities to the people.