Business Standard

Health care financing in line with government's intentions: NHA data

The annual production of health accounts helps in the optimisation of resources available to the best possible use

Atul Kotwal

Maj Gen (Prof) Atul Kotwal, SM, VSM, Executive Director, National Health Systems Resource Centre, New Delhi

Atul Kotwal
The government has undertaken several reforms since 2013-14 to reduce the financial burden of citizens on health care. Given that a strong health system relies on context-specific and inclusive actions, the government's “whole of government” and “whole of society” approach focuses on building a comprehensive, robust, and prompt platform within health systems to attain Universal Health Coverage (UHC).

Comprehensive Primary Health Care (CPHC) has been the cornerstone of any established health system, and the need to increase government spending on CPHC has also been highlighted in the National Health Policy 2017.

Converting the policy articulations to budgetary allocations, in the year 2018, the government launched its flagship programme Ayushman Bharat (AB) with two components i.e. Ayushman Bharat-Health and Wellness Centres (AB-HWC) and Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), to cover a range of services across all levels of care. Reiterating that CPHC is an affordable and effective path for India towards UHC, the government has ensured equal focus on structures and processes to strengthen and complement its efforts in this direction.

With 159,702 AB-HWCs operationalised so far to ensure delivery of CPHC (preventive, promotive, curative, rehabilitative, and palliative) closer to the community, supplementary interventions spanning availability of free medicines and diagnostics, increased access to care through ambulances, the addition of newer cadres of mid-level health providers at the lowest level of care, skill building mechanisms to enable task shifting and task sharing, technology interventions through teleconsultation and integrated IT-based platforms and community engagement have also been implemented to complement these efforts.

According to the latest National Health Accounts (NHA) data of 2019-20, Government Health Expenditure (GHE) as a share of the GDP has increased from 1.15 per cent in 2013-14 to 1.35 per cent in 2019-20. However, these figures hide the actual growth of GHE, which in per capita terms has doubled from Rs 1,042 to Rs 2,014 in the same period. Additionally, GHE grew by 12 per cent between 2018-19 and 2019-20, more than double the growth rate between 2017-18 and 2018-19. This growth is reflective of the government’s continued commitment to increasing its ownership for ensuring the good health of people and making all-out efforts for providing coverage of healthcare services and financing. The share of GHE in General Government Expenditure (GGE) has also shown an increasing trend from 3.78 per cent in 2013-14 to 5.02 per cent in 2019-20. This depicts the enhanced prioritisation of the health sector in recent years, in the overall government expenditure. Health, being the fundamental building block of human capital, and the increasing investment in this sector will have a multiplier effect on improving overall productivity in the country by creating a healthy workforce.

When further disaggregated and examined from the lens of Total Health Expenditure (THE), an upward trend is observed in GHE as a proportion of THE in the country, from 28.6 per cent in 2013-14 to 41.4 per cent in 2019-20, an increase of the magnitude of around 13 percentage points. Simultaneously, with the percentage of health expenditure increasing significantly, the out-of-pocket expenditure (OOPE) has reduced, thus easing the burden on individuals and families. The OOPE as a percentage of THE has declined from 64.2 per cent in 2013-14 to 47.1 per cent in 2019-20, a remarkably significant and laudable fall of around 17 percentage points, in a short span of 6 years. The initiatives like Free Drugs and Diagnostics programmes, National Ambulance Services, Pradhan Mantri National Dialysis Program, etc are instrumental in creating this huge dent in the OOPE. India ranks 67th out of of 189 countries in terms of per capita OOPE adjusted for Purchasing Power Parity (PPP). This indicates relatively lower cost of care in the country which enables people to have more income in hand to be spent on other household consumption, thus improving the overall health and well-being of the people.

Another heartening development in the process of continuously evolving health financing structure in the country is that along with the increasing magnitude of GHE, the flow of funds is in line with the recommendations of NHP 2017. This is reflected in the increased financial allocation to primary healthcare under the current government health expenditure from 51.1 per cent in 2013-14 to 55.9 per cent in 2019-20. This consistent flow of funds towards the primary healthcare sector will prevent people from getting a disease or episodes of ill health in the first place and moving from illness to wellness and well-being and thus reducing the burden on secondary and tertiary care facilities.

Social security expenditure on Health by the GoI has also increased as a share of THE from 6 per cent in 2013-14 to 9.3 per cent in 2019-20. As social security expenditure also includes government-financed health insurance schemes such as PMJAY, this increase is indicative of the commitment of the government to reduce the financial burden on the bottom 40 per cent of India’s population.

India is treading well on the path of informed policymaking in all areas in recent years and the health financing structure has a crucial role to play in guiding the policy in the right direction. There has been more focus on building resilient health systems and the foundation of strong infrastructure is being laid by devolving increased funds through schemes such as National Health Mission, Pradhan Mantri Swasthya Suraksha Yojana, Pradhan Mantri Ayushmann Health Infrastructure Mission, Pradhan Mantri Ayushman Bharat Digital Mission, 15th Finance Commission tied health grants, etc.

The annual production of health accounts helps in the optimisation of resources available to the best possible use. To further present a clearer picture of health expenditure in the country, an exercise of preparing State Health Accounts (SHA) estimates is being undertaken. The novel approach towards health policymaking, backed by evidence-based research, will further take us on the path of achieving UHC and turning the dream of making health services accessible and affordable to one and all, into a reality.

Maj Gen (Prof) Atul Kotwal, SM, VSM, Executive Director, National Health Systems Resource Centre, New Delhi
Views are personal
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Apr 29 2023 | 3:51 PM IST

Explore News