In 1983, India set for itself the goal of achieving “health for all” by 2000 and consequently the National Health Policy was formulated. This was subsequently revised in the year 2017. The goal for health is an important component of influencing the well-being of the people.
A large section of population still continues to live below the poverty line and cannot afford to spend on health. Among the manifold reasons for India’s failure to achieve the goal is inadequate attention paid to health issues and health financing needs by the government. There is low and inadequate financing of this sector.
India as a country as a whole is estimated to spend 6 percent of its GDP on health expenditure. Currently, the Government (Union and the States put together) spends roughly 1.13 per cent of GDP on health. The rest is estimated to be out of pocket expenditure. This is grossly inadequate compared to similar spending by other countries. As a result, 62 per cent of healthcare spending is financed by households through out-of-pocket expenditure at the point of care.
The other developed countries spend much larger amount of their fiscal resources on health, to the extent of 10% of GDP. Presently, only about 20% of people over 60 are covered by health schemes such as the Central Government Health Scheme, Employees State Insurance Scheme, Rashtriya Swasthya Bima Yojna, cooperative health insurance, employer medical reimbursement, or private insurance. This data comes from the India Ageing Report 2023.
The Allocation for health sector in the Union budget -2024 has been marginally increased to 90,000 crore rupees. The previous year allocation was 80,000 crore rupees. The marginal increase in this year’s allocation totally ignores the earlier commitment of the NDA government in the New National Health Policy -2017 to increase the public health sector expenditure on health to 2.5 percent of the GDP.
In FY2023-24, the expenditure of the Ministry of Health and Family Welfare was estimated to be Rs 89,155 crore, a 13 percent increase from revised estimates for 2022-23. The National Health Mission is its largest component, accounting for 33 percent of the Ministry’s budget, and medical colleges and hospitals account for 27 percent of the budget.
For the National Tele-Mental Health Programme, the Budget allocation has been increased from Rs 65 crore to Rs 100 crore. The allocation for autonomous bodies increased from Rs 17,250.90 crore in 2023-2024 to Rs 18,005.65 crore in 2024-25.
Among the autonomous bodies, the allocation for AIIMS, New Delhi has been increased from Rs 4,278 crore to 4,523 crore. The allocation for the ICMR has been increased from 2295.12 crore to Rs 2432.13 crore. High out-of-pocket expenditures and a shortage of healthcare personnel continues to be major issues.
The Challenge of Ill - Health
The probability of dying prematurely (between ages 30 and 70) from 4 major NCDs is 23% in India. This is higher than in Sri Lanka (17%), Bangladesh (22%) or Nepal (22%), China (17%) or Brazil (17%), and much higher than the OECD average of 12%. The projected cumulative economic loss from premature death, disability and treatment costs to India from 5 NCDs for the period 2012-2030 is an estimated US$4.58 trillion (in 2010 US dollars).
The NCDs are diabetes, cardiovascular diseases, cancer, chronic respiratory disease and mental health conditions. The projected cumulative economic loss from premature death, disability and treatment costs to India from 5 NCDs for the period 2012-2030 is an estimated US$4.58 trillion (in 2010 US dollars). The NCDs are diabetes, cardiovascular diseases, cancer, chronic respiratory disease and mental health conditions
Highly disintegrated service delivery, poorly regulated and fragmented health insurance (risk pooling) combined with persistently high levels of out of pocket expenditure, throw millions of Indians into poverty each year Out of pocket expenditure as a percentage of current health expenditure in India in 2015 was 65%. This is higher than the average in lower middle-income countries (57%), low-income countries (44%), Nepal (60%), Sri Lanka (38%), the other BRICS (Brazil – 28%, Russia – 36%, China – 32%, South Africa – 8%), and OECD countries (14%).19
While institutions like NITI AYOG in its dialogue series on health highlighted the need to overcome fragmentation of health sector in India and use mechanisms like risk pooling and strategic purchasing to overcome this fragmentation – the Union budget 2024 has failed to address this challenges and set policy road map in this direction.
Therefore, there is a need for strong advocacy by the medical profession for strengthening health sector and provide it with vision and direction.
Following should be the focus of dialogue and action in this regard:
1. Health is not merely a service. Its macroeconomic dimensions impact all other sectors of like education, employment and workforce efficiency and productivity. Hence, it should be given sufficient importance by the national policymakers that it deserves, and it should not be a domain of health ministry only.
2. Health is primarily a state responsivity in the Indian constitution framework. Hence, the onus of action and accountability to provide adequate health finances lies with state government. The union government has a complimentary role, and it should use its budgetary instruments skillfully and strategically to provide appropriate push to the state governments in this direction. Overall, the public sector budgetary allocation by Union government and state governments should enhance substantially.
3. The present nature of out-of-pocket spending to the extent of 50% of total health spending is regressive and compounds the fragmentation of health systems in India. This should be the focus of attention for all concerned. A major portion of this goes to catastrophic health expenditure.
4. The risk pooling arrangements to bring together the ayushman scheme, the ESI and other state health insurance schemes should be brought together to overcome the present fragmented health systems in India.
5. More resources should be allocated to National Health mission for strengthening the basic health infrastructure and health manpower in the country to reach the unreached segments of population.
6. The coverage of Ayushman scheme should be extended to presently uncovered segments of population.
7. The might and bullying power of private corporate health sector should be suitably contained. The Government’s present model of purchasing lab investigations and other secondary and tertiary services and unduly expensive. The government should adopt a long term vision and strategy in this direction and invest money and resources in public sector to provide all good quality secondary and tertiary medical services, including emergency medical care.
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