HomeBusinessIn pre-Covid India, healthcare spending fell as a percentage of GDP: 10...

In pre-Covid India, healthcare spending fell as a percentage of GDP: 10 points

In pre-Covid India, healthcare spending fell as a percentage of GDP: 10 points

In pre-Covid India, out-of-pocket spending on health as a percentage of GDP fell

The government recently highlighted “an encouraging trend” in health expenditure indicators in the National Health Accounts estimates for 2018-19. Nevertheless, total health expenditure as a percentage of GDP declined by one percentage point.

  1. Total expenditure on health as a percentage of gross domestic product (GDP) declined from 4.2 per cent to 3.2 per cent between 2004-05 and 2018-19. However, the total per capita health expenditure – per capita health expenditure in the country at current prices – increased from Rs 3,638 in 2013-14 to Rs 4,470 in 2018-19.

  2. Government health expenditure as a percentage of GDP also declined from 1.35 per cent in 2017-18 to 1.28 per cent in 2018-19. However, it has increased by 0.13 percentage points from 1.15 per cent as compared to 2013-14. Government health expenditure, including capital expenditure, stood at Rs 2,42,219 crore in 2018-19, up 5 per cent from Rs 2,31,104 crore in the previous fiscal.

  3. The government’s share in total health expenditure increased from 28.6 percent (2013-14) to 40.6 percent (2018-19) – an increase of 12 percent. Total health expenditure increased from Rs 5,66,644 crore in 2017-18 to Rs 5,96,440 crore in 2018-19 – a growth of 5 per cent. Total health expenditure, including external funds, constitutes the current and capital expenditure incurred by the government and private sector.

  4. The Centre’s share in government health expenditure fell to 34.3 per cent in 2018-19 from 40.8 per cent in the previous year. On the other hand, the share of states increased from 59.2 per cent to 65.7 per cent during the same period.

  5. Per capita government expenditure on healthcare increased by 74 per cent in 2013-14 from Rs 1,042 in 2013-14 to Rs 1,815 in 2018-19.

  6. Per capita out-of-pocket expenditure (OOPE) as a percentage of total health expenditure fell 16% points – from 64.2 per cent in 2013-14 to 48.2 per cent in 2018-19. OOPE refers to a payment made by a person to obtain medical services, which are often not covered by medical insurance. India’s OOPE is considered to be very high as compared to the economically advanced countries and countries with a strong social welfare system.

  7. Releasing the report, Dr VK Paul of NITI Aayog said that the guiding principle of the government is to reduce out-of-pocket expenditure (OOPE) on health care, which pushes individuals and families into poverty.

  8. Social security expenditure on health, which includes social health insurance programmes, government-funded health insurance schemes and medical reimbursement to government employees, increased from 6 per cent in 2013-14 to 9.6 per cent in 2018-19. In addition, government-funded health insurance expenditure increased by 167 per cent from Rs 4,757 crore to Rs 12,680 between 2013-14 and 2018-19.

  9. The report suggested that government spending on primary healthcare increased from 51.1 per cent in 2013-14 to 55.2 per cent in 2018-19. In India, primary health care is the first level of infrastructure, consisting of sub-centres and primary health centres. The increase in expenditure, Union Health Secretary Rajesh Bhushan said, strengthened the Centre’s decision to prioritize primary healthcare in the country.

  10. However, the report reflected the health expenditure of 2018-19, two years before the Covid-19 pandemic, showing significant improvement in some indicators. The pandemic-induced focus on public health is expected to catalyze government spending. “The current pandemic has shown how a health crisis can turn into an economic and social crisis,” the Economic Survey for 2021-22 said. In fact, it said health expenditure increased from Rs 2.73 lakh crore in 2019-20 (pre-Covid-19) to Rs 4.72 lakh crore in 2021-22 (Budget Estimate), showing a growth of 73 per cent.

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