OOPS... more things change, more they remain the same

INDRANIL MUKHOPADHYAY | Updated on March 10, 2018

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Govt expenditure on health has been low in 10 years till 2013-14, even as people’s Out-Of-Pocket Spending has remained high

India has produced its National Health Accounts for 2013-14, after a gap of almost 10 years.

These accounts help us understand the money spent on health; where the funds come from and how they flow to healthcare providers like hospitals. Essentially, how people’s health needs are financed.

Governments across the world use these accounts to tweak their healthpolicies. Many developed and developing countries produce NHA estimates every year and some, like China, bring out half-yearly accounts to track financial resources and make course corrections. Our apathy to produce health accounts regularly and systematically speaks volumes of how health is prioritised.

NHA estimates peg total expenditure on health for 2013-14 at 4 per cent of GDP. The last NHA, in 2004-05, pegged the total expenditure on health at 4.2 per cent of GDP, a marginal decline over a decade.

More than two thirds of the total spending on health (72.9 per cent) comes from households. And direct household spending, or Out-Of-Pocket Spending (OOPS), is the most regressive form of financing as it creates inequities in access, compels people to either forego care or pushes them into poverty; often people are forced to borrow or sell assets. A decade ago, the picture was similar: 71 per cent of the total spending came from households.

Globally, governments have invested heavily on health to reduce households’ burden. In India, public spending on health, as per NHA estimates’, was 1.15 per cent of GDP (₹1,29,778 crore) in 2013-14. This is among the lowest in the world, much lower than many developing countries and our neighbours like Sri Lanka (2 per cent), China (3.1 per cent), Thailand (5.6 per cent) or even Nepal (2.3 per cent).

In the last decade, a plethora of insurance schemes has been introduced by the Centre and the States to bring down OOPS. Government expenditure on various forms of insurance is about ₹27,101 crore- which is more than a fifth of the total public spending. If we take out the expenditure on insurance, which was virtually non-existent a decade ago, the total public spending on health comes down to 0.9 per cent of GDP, almost similar to what was being spent in 2004-05. Despite repeated pronouncements to increase public spending to 2.5 per cent of GDP, not much money has been put into improve government healthcare delivery.

Of every ₹10 spent on health, ₹4 goes towards medicines, purchased mostly by households from retail pharmacies. Expenditure on medicine alone pushes 34 million people into poverty every year. States like Tamil Nadu and Rajasthan have shown that a modest increase in investment on medicines enhances access to drugs in public facilities and helps curb household burden and the overall healthcare cost.

Investment on preventive and public health is alarmingly low: just one-tenth of the total spending. Given the resurgence of communicable diseases like malaria, Kala-ajar, and recurrent epidemics of dengue and cholera, increasing burden of non-communicable diseases like diabetes, diseases of heart, mental disorders, etc., it is high time that public health investment was beefed up.

And It is not difficult for the government to raise additional financial resources for healthcare. For example, if a fraction of the revenue foregone in the form of tax concessions to corporates (6 per cent of GDP) is collected, or if share-market transactions are taxed more stringently and earmarked for health, resources can be mobilised. However, these are matters of political choice; a choice between a healthy society or prosperity for select few should not be difficult for a government keen to bring in achhe din.

(The writer is a Wellcome Trust post-doctoral fellow and Senior Research Associate with the Public Health Foundation of India.)

Published on September 16, 2016

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