Healthcare needs a reform, spending boost

Shikha Dahiya/Aditi Pathak | Updated on April 06, 2021

Large inter-State variations in funding, shortcomings in quality of care and neglect of urban health continue to haunt the sector

Since Independence, India has made some notable gains on the health front. For instance, life expectancy at birth has increased, infant mortality and crude death rates have fallen steeply, diseases such as smallpox, polio and guinea worm have been eradicated, and leprosy is on the verge of getting eliminated. However, in spite of this progress, the health sector in the country remains one of the most critical areas in need of reform and public investment.

The public expenditure on health was 0.9 per cent of GDP in 1990. Since the liberalisation and globalisation reforms, it was assumed that the private sector will fill in the gap of healthcare need. However, this has remained elusive for 30 years. As per data from Finance Accounts, public health expenditure was 0.96 per cent of GDP in 2018-19, of which, 70 per cent of this was done by the States and only 30 per cent by the Centre.

A few of the many challenges include insufficient funding, shortcomings in quality of care, neglect of urban health, inadequate number of health personnel, and dearth of other facilities and diagnostics. About 70 per cent of expenditure on health is out-of-pocket, and this is one of the highest in the world. High out-of-pocket expenditure poses largest risk to those living below and at the margins of the poverty line.

The problem is aggravated by large inter-State variations in terms of health funding as well as health outcomes. All States, barring Meghalaya, are spend less than 8 per cent of their budget on health, with the average being 5.18 per cent in 2018-19. Also, the per capita health spending of Bihar, Uttar Pradesh and Jharkhand is about half that of Kerala and Tamil Nadu.

The ratio of doctors and nurses to the population is low as compared to WHO norms. There is a significant shortfall of government health facilities like sub-centres, primary health centres, community health centres, with severe shortfall noticed in Bihar, Jharkhand and West Bengal.

Besides, seats in medical colleges are highly skewed across States with two-thirds of all MBBS seats in seven States — Tamil Nadu, Kerala, Andhra Pradesh, Telangana, Karnataka, Maharashtra and Gujarat.

Inter-State variations are also evident in terms of health outcomes. Life expectancy ranges from 65 years in Uttar Pradesh to 75.2 years in Kerala. In Tamil Nadu and Kerala, the TFR (total fertility rate) is 1.59 and 1.79, respectively, similar to that in advanced countries. But in Bihar and Uttar Pradesh, the TFR is 2.93 and 2.61, respectively.

The infant mortality rate ranges from only four in Nagaland to 48 in Madhya Pradesh. This disparity is also present in nutritional outcomes with Bihar, Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Rajasthan and Uttar Pradesh having very high proportion of children who are underweight and stunted.

The pandemic is further harming health, social and material well-being worldwide, with the poorest being hit hardest. School closures, social distancing and confinement increase the risk of poor nutrition among children.

Besides large variations in per capita expenditure and health outcomes across States, it has also been observed that States have shown little convergence over the past few years in terms of spending on healthcare as well as in terms of indicators like infant and under-five mortality, stunting and under-weight children. There is clearly a need to break the vicious circle of low spending and poor health outcomes.


Measures undertaken

The Centre has undertaken several reforms which will go a long way in ameliorating the situation. Ayushman Bharat, launched in 2018, is the biggest healthcare scheme in the world, providing up to ₹5 lakh per family per year for secondary and tertiary care hospitalisation.

Poshan Abhiyan has the objective of building a people’s movement for holistic nutrition. The National Digital Health Mission (NDHM) launched in 2020 will improve access and reach and enhance the doctor-patient consultation experience.

Of the six pillars proposed in Budget 2021-22, the very first is on health and well-being. There has been a significant increase in the allocation for health to ₹2.23 lakh crore. The Fifteenth Finance Commission also recommended ₹70,051 crore for a period of five years (2021-26) with focus on primary healthcare.

However, the increased allocation should be complemented with appropriate regulatory changes like restructuring of MBBS curriculum to make it competency based with a certain degree of specialisation, restructuring and streamlining the role of nursing professionals, constituting an All India Medical and Health Service and correcting the asymmetrical distribution of medical colleges.

The transfers under health-related CSS may focus on outputs and outcomes, with adequate flexibility being provided to States to choose their own pathways to achieve the results.

At the same time, as the majority of investment is coming from States, the States should allocate higher budget to this sector and use custom-based approach for better implementation of health programmes to reach the desired outcomes.

The writers worked as Joint Directors with the Fifteenth Finance Commission. The views are personal


Published on April 06, 2021

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