Government to hike health care investment to 2.5% of GDP by 2020

Health cess recommended; public health care to be primary focus

Nitin Sethi New Delhi
The National Democratic Alliance (NDA) government plans to increase public investment in health from 1.04 per cent of GDP (gross domestic product) to 2.5 per cent by 2020, with 70 per cent of this being dedicated to primary health care. This target has been set in the overhauled draft National Health Policy that now emphasises on substantially ratcheting up government investment in public health care facilities across the country.

A draft policy was first put up for public discussion in December 2014 and has substantially been revised putting up specific targets focussing on increasing government spending on public health services. Under the revised version, which Business Standard reviewed, the government plans to ensure that it spends an average Rs 3,800 per capita annually on health as compared to less than Rs 1,000 being spent at the moment at current prices.

While at least 70 per cent of the funds would be spent on primary health care, 20 per cent would be spent on secondary health care and 10 per cent on tertiary health care. Of the total funds required, the Union government would provide 40 per cent, which could be shored up through a health cess on the lines of an education cess. The cess fund to be used specifically for public health investments could be partly shored up by imposing additional duties on tobacco, alcohol, fatty, salty and sugary products that are considered unhealthy by experts. States would be encouraged through performance based incentives to ensure that at least 8 per cent of their annual budgets are dedicated to providing health services.

The draft policy says the government would provide essential and generic drugs and diagnostics free of cost for all primary health care needs in the country - something the finance minister had announced in the previous Budget. At the tertiary care level too, patients in geriatric and chronic care concerns would get most drugs and diagnostics either free or subsidised with fair price selling mechanisms for most and payment by the well-heeled.

A very detailed road map for the implementation of the policy has also been prepared on a phase-wise basis. Specific quantified targets too have been proposed under the policy to measure achievements. The parameters have been set for countrywide health status, performance of public health facilities, the financial plans and other deliverables under the policy.

The focus would be on investing to build up public health facilities in rural and urban India. To meet strategic gaps in the supply that public health infrastructure cannot provide, the government will procure specific services from the private health care industry under a regulatory framework in the secondary and tertiary health sectors. There too the not-for-profit private sector would be encouraged. In case of need primary care facilities and could also be contracted out to the not-for-profit private sector under the policy besides seeking non-medical as well as advanced diagnostics and ambulance services from outside the government system. The procurement of services from the private sector would be done by autonomous authorities and trusts under the ministry of health at the centre and state level.

Speaking on the basis of anonymity, an official involved in the preparation of the draft said, "The failure to attain minimum levels of public health expenditure remains the single most important constraint. We recognise the growth and potential of private sector, but global evidence shows health outcomes are closely related to levels of public health expenditure. Our plan is to achieve such security for the people through this plan."

The policy also plans a substantial overhaul of the regulatory bodies, laws and regulations, by setting up a National Council for Human Resources in Health besides other agencies and legal frameworks. The council would have doctors, patients and representation from society in a balanced manner. It notes that there are concerns about existing medical councils being riddled with conflict of interest.

The government plans to boost investments and focus on domestic pharmaceutical companies as well as promote prime minister's 'Make in India' plans in the medical equipment sector under the policy.

The policy proposes setting up task-forces to also to formulate detailed 'preventive and promotive' health care strategies in seven areas and schemes such as Swacch Bharat Abhiyan and Nasha Mukti Abhiyan involving all concerned ministries.

The alternative Ayush systems of treatment will also be given an important place in the health care systems with such treatments being provided along with allopathic treatments at same public health facilities and bridge courses being run to provide Ayush practitioners ability to provide allopathic remedies as well at mid-levels of the health sector.

The policy also details mechanisms to see improve human resource needs in the health sector based on specific needs of the public health systems. This would include building new medical colleges and further converting district hospitals to new medical colleges in states with low capacities, besides adding new All-India Institute of Medical Sciences in the country.

  • Govt investment to go up from 1.04% to 2.5% of GDP by 2020 - equals per capita expenditure of Rs 3,800 at current prices
  • 40% of total investment from Union government. States to invest more than 8% of state budgets on health
  • 70% investments in primary health. 20% in secondary and 10% in tertiary treatment
  • Govt to consider health cess on products like Tobacco, alcohol, fatty, salty and sugary foods
  • Specific health targets to monitor achievements
  • Special focus on Ayush and its practitioners
  • Seven task forces for preventive healthcare
  • Detailed phase-wise roll-out plan for policy
  • Massive increase in public health services. Procurement of specific health services from private sector for secondary and tertiary treatment to fill gaps. Not-for-profit to get primacy
  • Free essential and generic drugs and diagnostics for primary health care
  • Boost to domestic pharma sector, health equipment and research under Make in India.
  • Revamp of medicine, health and training regulatory regime

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First Published: Aug 19 2015 | 12:25 AM IST

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