Government Health Spending on the Rise, Easing Out-of-Pocket Expenses
New Delhi, April 12, 2023 - The latest National Health Accounts (NHA) data for the fiscal year 2021-22 indicates a significant reduction in Out-of-Pocket Expenditure (OOPE) on healthcare, attributed to a marked increase in government investment and a bolstered public healthcare framework.
The data shows that between 2014-15 and 2021-22, government health expenditure (GHE) as a percentage of GDP has seen a rise from 1.13% to 1.84%. Moreover, the share of GHE in total government spending has climbed from 3.94% to 6.12%. This financial commitment has tripled per capita health spending from ₹1,108 to ₹3,169, enhancing the affordability and accessibility of public health services, which in turn has directly impacted the reduction in OOPE.
The government's proactive approach was particularly evident during the response to the COVID-19 crisis, where investments were not only aimed at addressing immediate health needs but also at tackling long-term health challenges like the rise in non-communicable diseases (NCDs).
Key Factors Contributing to the Decline in OOPE:
Increased Government Health Expenditure (GHE): Enhanced funding has led to better public healthcare facilities, making healthcare more accessible and reducing the need for personal expenditure.
Expansion of Social Security Expenditure (SSE): The government's investment in health insurance and social health programs has risen, now accounting for 8.7% of Total Health Expenditure (THE) from 5.7% in 2014-15, safeguarding individuals from catastrophic health costs.
Government-Funded Insurance Schemes: Initiatives like Ayushman Bharat and various state-level schemes have covered millions, significantly decreasing reliance on personal finances for healthcare.
Public Health Infrastructure and Workforce: Investments in infrastructure and workforce development, especially in rural areas, have improved service availability, thereby reducing OOPE.
Targeted Programs for NCDs: With NCDs on the rise, government initiatives have focused on managing and preventing these conditions, lessening the financial burden on patients.
Strategic Health Response Post-COVID: The health crisis prompted a robust response, laying the groundwork for a more resilient and affordable healthcare system.
Implications for India's Healthcare System:
Enhanced Accessibility: Lower OOPE encourages more people to seek medical care without financial strain, promoting equity in healthcare access.
Strengthened Public Healthcare: With reduced OOPE, public systems can now serve a wider population, distributing resources more evenly.
Improved Health Outcomes: Easier access to preventive care can lead to better health outcomes and potentially decrease the overall health burden.
Financial Stability for Households: Less financial outlay on healthcare means families can better manage other essential expenses, enhancing their financial security.
Boost in Healthcare Workforce: Increased funding enables better staffing and training, crucial for effective health service delivery.
Steps Towards Universal Health Coverage: These developments are steps towards making healthcare a right for all, aligning with the vision of universal health coverage.
The NHA data underscores a commendable shift in India's healthcare policy, moving towards a system where healthcare is increasingly viewed as a public good, ensuring that financial constraints do not dictate health outcomes.