India’s Health Spending (National Health Accounts 2018-19 by Jasmin Nihalani)

India’s National Health Policy (2017) aims to increase Government spending on health to 2.5% of GDP by 2025. National Health Policy 2017 recommended that expenditure on health cross 8% of the total spending, but none of the states did so in FY19.

The Policy emphasizes greater investment in preventative and primary healthcare; access to and financial protection at the secondary and tertiary care levels as well as the provision of free drugs, diagnostics, and emergency care services at all public hospitals.

Further, the Policy envisages private sector collaboration, including the use of financial and non-financial incentives to encourage participation.

Among 189 countries, India is one of the highest OOP (Out Of Pocket) health expenditures (53.2%) and the lowest health expenditure (3.39%).

States such as U.P., W.B., and Punjab have a relatively higher OOP expense and low per capita spending by the government.

As health is a State subject, States undertake a majority of public health spending. However, public health spending as a share of total government expenditure has largely remained stagnant or reduced for most States in recent years.

In nine States, the share of out-of-pocket expenditure in total health expenses was above 50%, while in 17 States, the government spending per capita on health was below Rs.2,000.

Notably, in several States, health inflation has surged after the pandemic, a cause of concern given low levels of insurance coverage and insufficient government health budget.

WAY FORWARD

• Equitable distribution – With increased spending, it is incumbent on the Central and state governments to ensure that public funds are spent wisely. The focus must be on providing top-class specialist healthcare to people in towns and villages — and not on creating behemoth hospitals in the cities, which then become clogged with patients traveling from far and wide for treatment. Good public healthcare is the right of every citizen and the government must do its utmost to ensure that it is provided to them closest to where they live — village, town or city.
• Social health insurance – PMJAY (a model which integrates private entities with state-sponsored healthcare)
• Increase in BUDGET ALLOCATION – The Budget 2022-23 allocated INR 83,000 cr to the Department of Health and Family Welfare, nearly 16.5 percent increase in comparison to the budget of INR 71,269 cr in 2021-22.