Health sector underperforming due to fragmentation: Niti Aayog

"At the systems level, overcoming the challenges of fragmentation across healthcare financing and service delivery will help us optimise both quality and access. India now needs to build on its many opportunities to achieve further progress on the health of its citizens and respond to the growing aspirations and needs of a new India," said Rajiv Kumar, Vice Chairman, NITI Aayog.

The report noted that health financing is fragmented at all three levels -- revenue sources, health insurance (financial risk pooling), and strategic purchasing (how funds are used to set incentives for service providers to maximise efficiency, responsiveness and quality in the health service provider market).

There are high levels of fragmentation in the sources of revenues, with most health expenditure (about 62 per cent) coming directly from households.

Currently the government (Union and the states put together) spends roughly 1.13 per cent of GDP on health, which 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.

Lauding the significant improvements made in India''s health sector, Bill Gates, co-chairman of Bill and Melinda Gates Foundation, said that primary healthcare is extremely important for all. India is in a very hopeful situation, he said, and is set to be an example for other countries.