An overwhelming 70% of healthcare expenses in India are met by out of pocket expenditure by the individual, due to which about 7% population is pushed below the poverty threshold every year.
The Union Cabinet recently approved the launch of the National Health Protection Mission which was announced during Budget 2018-19. The Mission aims to provide a cover of five lakh rupees per family per year to about 10.7 crore families belonging to poor and vulnerable populations. The insurance coverage is targeted for hospitalisation at the secondary and tertiary health care levels. This post explains the healthcare financing scenario in India, which is distributed across the centre, states, and individuals.
Indian health spending compared to other countries
The public health expenditure in India (total of centre and state governments) has remained constant at approximately 1.3% of the GDP between 2008 and 2015, and increased marginally to 1.4% in 2016-17. This is less than the world average of 6%. Note that the National Health Policy, 2017 proposes to increase this to 2.5% of GDP by 2025.
Including the private sector, the total health expenditure as a percentage of GDP is estimated at 3.9%. Out of the total expenditure, effectively about one-third (30%) is contributed by the public sector. This contribution is low compared to other developing and developed countries. Examples include Brazil (46%), China (56%), Indonesia (39%), USA (48%), and UK (83%).
The consumer pays out of his own pocket.
Given the public-private split of health care expenditure, it is quite clear that it is the private expenditure which dominates, i.e., the individual consumer bears the cost of her own healthcare. Let’s look at a further disaggregation of public spending and private spending to understand this.
In 2018-19, the Ministry of Health and Family Welfare received an allocation of Rs 54,600 crore (an increase of 2% over 2017-18). The National Health Mission (NHM) received the highest allocation at Rs 30,130 crore and constitutes 55% of the total Ministry allocation (see Table 1). Despite a higher allocation, NHM has seen a decline in the allocation vis-à-vis 2017-18.
Interestingly, in 2017-18, expenditure on NHM is expected to be Rs 4,000 crore more than what had been estimated earlier. This may indicate a greater capacity to spend than what was earlier allocated. A similar trend is exhibited at the overall ministry level where the utilisation of the allocated funds has been over 100% in the last three years.
A NITI Aayog report (2017) noted that low income states with low revenue capacity spend significant lower on social services like health. Further, differences in the cost of delivering health services have contributed to health disparities among and within states.
Following the 14th Finance Commission recommendations, there has been an increase in the states’ share in central pool of taxes and they were given greater autonomy and flexibility to spend according to their priorities. Despite the enhanced share of states in central taxes, the increase in health budgets by some states has been marginal.
If cumulatively 30% of the total health expenditure is incurred by the public sector, the rest of the health expenditure, i.e. approximately 70% is borne by consumers. Household health expenditures include out of pocket expenditures (95%) and insurance (5%). Out of pocket expenditures– the payments made directly by individuals at the point of services which are not covered under any financial protection scheme– dominate. The highest percentage of out of pocket health expenditure (52%) is made towards medicines.
This is followed by private hospitals (22%), medical and diagnostic labs (10%), and patient transportation, and emergency rescue (6%). Out of pocket expenditure is typically financed by household revenues (71%).
Note that 86% of rural population and 82% of urban population are not covered under any scheme of health expenditure support. Due to high out of pocket healthcare expenditure, about 7% population is pushed below the poverty threshold every year.
Out of the total number of persons covered under health insurance in India, three-fourths are covered under government-sponsored health schemes and the balance one-fourth are covered by private insurers. With respect to the government-sponsored health insurance, more claims have been made in comparison to the premiums collected, i.e., the returns to the government have been negative.
It is in this context that the newly proposed National Health Protection Mission will be implemented. First, the scheme seeks to provide coverage for hospitalisation at the secondary and tertiary levels of healthcare. The High Level Expert Group set up by the Planning Commission (2011) recommended that the focus of healthcare provision in the country should be towards providing primary health care. It observed that focus on prevention and early management of health problems can reduce the need for complicated specialist care provided at the tertiary level.
Note that depending on the level of care required, health institutions in India are broadly classified into three types: primary care (provided at primary health centres), secondary care (provided at district hospitals), and tertiary care institutions (provided at specialised hospitals like AIIMS).
Second, the focus of the Mission seems to be on hospitalisation (including pre and post hospitalisation charges). However, most of the out of the pocket expenditure made by consumers is actually on buying medicines (52%) as seen earlier. Further, these purchases are mostly made for patients who do not need hospitalization. #KhabarLive
I just want to tell you that I am just very new to weblog and seriously liked your web-site. Likely I’m likely to bookmark your blog post . You certainly come with terrific articles and reviews. Thanks for sharing with us your webpage.
MetroClick specializes in building completely interactive products like Photo Booth for rental or sale, Touch Screen Kiosks, Large Touch Screen Displays , Monitors, Digital Signages and experiences. With our own hardware production facility and in-house software development teams, we are able to achieve the highest level of customization and versatility for Photo Booths, Touch Screen Kiosks, Touch Screen Monitors and Digital Signage. Visit MetroClick at http://www.metroclick.com/ or , 121 Varick St, New York, NY 10013, +1 646-843-0888
Since 1998, Clean Services Northwest company has been offering window cleaning, window washers, window cleaners to companies, businesses and organizations in the greater Portland Metro Area, providing quality property maintenance services at a fair price. Clean Services Northwest specializes in window cleaning, pressure washing, carpet cleaning, and gutter cleaning. They also perform other specialized maintenance tasks, such as roof cleaning, vent cleaning, and construction cleanup. Our technicians will have your building or facility looking great, whether we have left the glass sparkling, the concrete brightened, the flooring spotless, or all of the above. Visit us at http://www.cleanservicesnorthwest.com/ or Clean Services Northwest, 8910 SE Fuller Rd, Happy Valley, OR 97086, USA
Hello there, just became familiar with your webpage through Yahoo and bing, and realized that it is genuinely interesting. I’ll like if you decide to keep up this.
Wow! This can be one particular of the most useful blogs We’ve ever arrive across on this subject. Actually Magnificent. I’m also an expert in this topic so I can understand your effort.
I am curious to find out what blog system you are using? I’m experiencing some small security issues with my latest site and I’d like to find something more safe. Do you have any recommendations?
Hello! This is my first visit to your blog! We are a team of volunteers and starting a new project in a community in the same niche. Your blog provided us useful information to work on. You have done a wonderful job!
Hello I am so grateful I found your webpage, I really found you by error, while I was searching on Bing for something else, Nonetheless I am here now and would just like to say thanks for a marvelous post and a all round interesting blog (I also love the theme/design), I don’t have time to go through it all at the moment but I have bookmarked it and also included your RSS feeds, so when I have time I will be back to read much more, Please do keep up the great work.
Only wanna state that this is very useful , Thanks for taking your time to write this.
What i do not realize is in reality how you are no longer actually a lot more neatly-appreciated than you may be right now. You are so intelligent. You understand therefore considerably in relation to this matter, made me personally believe it from a lot of varied angles. Its like women and men don’t seem to be fascinated except it?s something to accomplish with Lady gaga! Your own stuffs excellent. At all times deal with it up!
I just intend to advise you that I am new to writing a blog and incredibly adored your site. Quite possibly I am likely to save your blog post . You definitely have superb article content. Acknowledge it for giving out with us your very own blog article
You’ll find it nearly extremely difficult to find well-updated viewers on this area, unfortunately you seem like you understand whatever you’re preaching about! Appreciate It
Hello there, just turned receptive to your wordpress bog through Search engine, and have found that it’s quite educational. I’ll appreciate if you keep up such.
Amazing! This blog looks exactly like my old one! It’s on a totally different subject but it has pretty much the same page layout and design. Great choice of colors!
Hi! Quick question that’s entirely off topic. Do you know how to make your site mobile friendly? My website looks weird when browsing from my iphone 4. I’m trying to find a theme or plugin that might be able to fix this issue. If you have any recommendations, please share. Cheers!
Hi there! Do you know if they make any plugins to help with SEO? I’m trying to get my blog to rank for some targeted keywords but I’m not seeing very good success. If you know of any please share. Cheers!
Wow that was strange. I just wrote an really long comment but after I clicked submit my comment didn’t appear. Grrrr… well I’m not writing all that over again. Anyhow, just wanted to say superb blog!
I would like to convey my passion for your kindness in support of all those that need help with this important study. Your real commitment to passing the solution throughout appears to be extremely significant and have specifically made regular people like me to reach their dreams. The insightful guidelines indicates so much to me and especially to my peers. Thanks a lot; from each one of us.
It¡¦s really a great and useful piece of information. I am happy that you just shared this helpful information with us. Please stay us informed like this. Thanks for sharing.
Normally I do not learn post on blogs, however I wish to say that this write-up very compelled me to take a look at and do so! Your writing style has been amazed me. Thanks, quite great post.
Comments are closed.