The National Health Accounts data for 2013-14 present fresh evidence that India continues to have a non-serious approach to the provision of universal health coverage to all its citizens.
India’s health system is one of the most privatised in the world, poorly regulated and accessible only to those with income levels well above the average.
All these attributes are, once again, strongly borne out by the NHA data, which lay bare the extremely low government spending on health which, at 1.15 per cent of GDP, compares poorly with even Sub-Saharan Africa.
The share of State governments, which are largely responsible for provision of health care, in government health expenditure is estimated at 0.75 per cent of GDP.
Evidently, a health policy that fails to pool the financial risk of illness at the population level results in impoverishing payments made out of personal funds — and the NHA figures confirm that despite rising government revenues, the bulk of Indian health spending, a staggering 64.2 per cent of health expenditure, is met by households out-of-pocket.
That such OOP expenses declined by five percentage points over a decade is encouraging, but this is insignificant in comparison with the achievement in, say, Thailand, where 75 per cent of the population was brought under UHC in just one year.
n 2013-14, the Total Healthcare Expenditure (THE) of India was Rs. 4.5 lakh crores, which amounts to 4 per cent of the Gross Domestic Product (GDP).
The Draft National Health Policy 2015 recognises this to be a problem. It says: “Global evidence on health spending shows that unless a country spends at least 5-6 per cent of its GDP on health and the major part of it is from government expenditure, basic health care needs are seldom met.”
Of the total amount of Rs. 4.5 lakh crores, Current Health Expenditure (CHE) constituted Rs. 4.2 lakh crores (93 per cent). Rs. 31.9 thousand crore (7 per cent) went to Capital Expenditure.
- Households continue to be the dominant contributors (73 per cent of CHE) to health finance in India. The bulk of the total money circulating in Indian healthcare – around 69 per cent – comes from Out Of Pocket (OOP) payment by households. OOP is the money which individuals pay out of their own.
- High OOP spending is a result of abysmally low government spending on health, constituting just 1.15 per cent of GDP and 30 per cent of CHE – the lowest among the BRICS nations.
- It has long been argued that government spending on health should increase to 2.5 per cent of GDP, a figure also envisaged by the Draft National Health Policy 2015.
- Around 45 per cent is spent on outpatient care (including both general and special treatment) as compared to 35 per cent in inpatient care.
- Overall, the current expenditure on curative care is estimated at Rs 3.4 lakh crores (80.4 per cent) whereas. In contrast, a meagre 9.6 per cent – is spent on preventive care.
- All the government-funded national health programmes such as the National Disease Control Programmes are covered under this category. However, it does not include spending on sanitation or providing access to clean drinking water.
Raising government expenditure on health, in conjunction with the States, should form the basis of policy change; the road map for this was proposed by the Planning Commission’s High Level Expert Group in 2011.
Remedial policies in two key areas can quickly scale up to reduce the OOP burden on households.
- One is to put in place a centralised system for procurement of essential drugs, relying mainly on quality generics and distributing them through the State government system.
- The other is to arrive at the cost of all medical procedures for different classes of hospitals, laying down standards and forming regulatory authorities at the State and district levels under law to enforce the rules.
It was estimated by the Planning Commission group, for instance, that spending 0.5 per cent of GDP (compared to 0.1 per cent spent by the public health system) could ensure the availability of essential medicines free of cost to all Indians.
Regulatory controls would automatically lead to a reduction in costs, and curbing of unethical and corrupt practices by hospitals and diagnostics centres.
It should then be easier to quickly extend free health insurance to more classes of people, such as senior citizens, children and the disabled, and achieve universal coverage early.