Healthcare: Poor public spending burns hole in people’s pocket

Rs 4,98,0000 crore spent on health in India in the year 2015, Rs 3,150,000 crore came from individuals’ pockets. Public spending on health is just 1.5 per cent of the GDP.

Published: 19th November 2019 09:40 AM  |   Last Updated: 19th November 2019 09:46 AM   |  A+A-

Express News Service

NEW DELHI:  Of the total money spent on healthcare in India every year, nearly 64 per cent comes from out-of-pocket (OOP) of households, a report by the Niti Aayog has highlighted, exposing the financial vulnerability of a large chunk of population burdened with healthcare expenditure.

The report, ‘Health System for a New India: Building Blocks-Potential Pathways to Reform’, released in the presence of Microsoft founder and philanthropist Bill Gates on Monday, showed that of Rs 4,98,0000 crore spent on health in India in the year 2015, Rs 3,150,000 crore came from individuals’ pockets. Public spending on health is just 1.5 per cent of the GDP.

The proportion of OOP should not be more than 20-30 per cent of total health expenditure, the report suggests.

“Even now, while 40 per cent of the most vulnerable population has been covered under the ambitious Pradhan Mantri Jan Arogya Yojana and 5 per cent of the population avail various government and private insurance schemes, a big population is left totally untouched,” said Alok Kumar, advisor (Health) with the Aayog. “And that’s not a good situation to be in.”

ALSO READ | Small players dominate private care sector

The report has said: “India’s health system has a fragmented and low level of risk-pooling schemes, characterised by multiple contributory — public and private — and non-contributory risk-pooling schemes, many different benefits packages, different fragmented and often absent regulatory systems and substantial differences in performance across schemes focused on ensuring access to healthcare and financial protection of beneficiaries.”

The report notes that if no changes are introduced in the risk-pooling system, the current trends trajectory will be consolidated, continuing a highly fragmented risk pool that is “inefficient and inequitable”.

“Coupled with regressive public finance subsidisation and a weekly regulated commercial health insurance sector, a no-reform scenario would determine a bleak future for India’s healthcare sector,” it warns. “As things stand today, in a decade the healthcare sector will be dominated by inefficient commercial insurance for the haves and persistent high OOPs for the have nots.”    

The report recommends several short term and long term measures to attain universal health coverage that include integration of various existing central schemes and expansion of PMJAY, apart from building a robust primary healthcare system through the health and wellness centres.

Rs 4,98,0000 cr spent on health in India in 2015

Rs 3,150,000 cr came from individual’s pockets

1.5% of GDP is public spending on health

80% care delivery in India happens in private sector

Solo staff at smaller clinics

The report says while the large corporate chains and standalone hospitals dominate the top-end of the private market, the bulk of the private healthcare services are delivered by solo practitioners and small, independent facilities. 


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