Out-of-pocket health spend falls, govt spend rises in NHA 2021-22

India has recorded a decline in out-of-pocket expenditure (OOPE), or expenditures directly made by households at the point of receiving health care, according to National Health Accounts estimates released by the Ministry of Health and Family Welfare for 2021-22. 

The report suggests that the OOPE declined to 39.4 per cent of total health expenditure (THE) in 2021-22 from 48.8 per cent in 2017-18 due to an increase in the government’s share from 40.8 per cent to 48 per cent. 
 

This constitutes current and capital expenditures incurred by government and private sources including external funds. This drop is in line with the government’s stated position to reduce OOPE as a proportion of total health expenditure to 35 per cent by financial year 2025-26 (FY26).
 

Commenting on these findings, Union Health Minister JP Nadda said that the enhancement of public financing of healthcare and the decrease in OOPE as proportion of total health expenditure can be seen as constructive signs that the country is on the right track towards realisation of Universal Health Coverage (UHC) as postulated in the National Health Policy, 2017.  
 

Another reason for the drop in OOPE is increase in private health insurance expenditure as part of total health expenditure, alongside government schemes such as Ayushman Bharat.
 

According to the estimates, the coverage of private health insurance also showed an upward trend, rising from 5.8 per cent in 2017-18 to 7.4 per cent in 2021-22. 

The social security expenditure on health, which includes finances allocated by the government towards payment of premiums for the Centre and state government financed health insurance schemes like Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY) saw a slight fall to 8.7 per cent in 2021-22 from 9 per cent in 2017-18.  
 

This spend also includes premium paid for other state specific health insurance schemes, employee benefit schemes or any reimbursements made to government employees for healthcare purposes and social health insurance scheme expenditures.  

As a percentage of the gross domestic product (GDP), government health expenditure rose marginally from 1.35 per cent in 2017-18 to 1.84 per cent in 2021-22. The rise comes in line with the government’s target of raising health expenditure to 2.5 per cent of GDP by 2025. 

The per capita health expenditure has nearly doubled from Rs 1,753 to Rs 3,169 from 2017-18 to 2021-22.
 

Commenting on the trends, Health Secretary Apurva Chandra said that the trends indicate the progress made by India’s health system.
 

“The NHA acts as a monitoring and evaluation tool for the current policies undertaken by the government in the health sector, and it further builds the case for evidence-based policy making in the country,” he added.