The government pointed to “an encouraging trend” in health spending indicators in recent National Health Accounts estimates for 2018-19. Nevertheless, total health expenditure as a percentage of gross domestic product fell by one percentage point.
Total health expenditure as a percentage of gross domestic product (GDP) fell from 4.2 percent to 3.2 percent between 2004-05 and 2018-19. However, total health expenditure per capita – the health expenditure per person in the country at current prices – increased from Rs 3,638 in 2013-14 to Rs 4,470 in 2018-19.
Public health expenditure as a percentage of GDP also fell from 1.35 percent in 2017-18 to 1.28 percent in 2018-19. However, compared to the year 2013-14, it increased by 0.13 percentage point from 1.15 percent. Public health expenditure, including capital expenditure, amounted to Rs 2,42,219 crores in 2018-19, up 5 percent from Rs 2,31,104 crores in the previous fiscal year.
The government’s share of total health expenditure increased from 28.6 percent (2013-14) to 40.6 percent (2018-19) — an increase of 12 percentage points. Total health expenditure increased from Rs 5,66,644 crores in 2017-18 to Rs 5,96,440 crores in 2018-19 – a 5 percent increase. Total health expenditure represents current and capital expenditure of the government and the private sector, including external funds.
The center’s share of government health spending fell to 34.3 percent in 2018-19, from 40.8 percent in the previous year. On the other hand, the states’ share rose from 59.2 percent to 65.7 percent over the same period.
Public expenditure per capita on health care has increased by 74 percent since 2013-14, from Rs 1,042 in 2013-14 to Rs 1,815 in 2018-19.
The Out-of-Pocket Expenditure (OOPE) per capita as a percentage of total health expenditure decreased by 16% points – from 64.2 percent in 2013-14 to 48.2 percent in 2018-19. OOPE refers to payments made by an individual to receive medical services, which are often not covered by medical insurance. India’s OOPE is considered very high compared to economically developed countries and countries with robust social security systems.
In issuing the report, Dr VK Paul of Niti Aayog noted that the government’s guiding principle has been to reduce its own health expenditure (OOPE) spending, which pushes individuals and families into poverty.
Social Security spending on health, including the social health insurance program, government-funded health insurance and medical benefits to government employees, increased from 6 percent in 2013-14 to 9.6 percent in 2018-19. In addition, government-funded health insurance increased by 167 percent between 2013-14 and 2018-19, from Rs 4,757 crores to Rs 12,680.
The report suggested that government spending on primary health care increased from 51.1 percent in 2013-14 to 55.2 percent in 2018-19. In India, primary health care is the first level of health care infrastructure, which includes sub-centers and the Primary Health Centre. The surge in spending, said Health Minister Rajesh Bhushan, reinforced the Center’s decision to prioritize primary health care in the country.
However, while the report showed significant improvement in certain indicators, it reflected health spending from 2018-19, two years prior to the Covid-19 pandemic. The pandemic-induced focus on public health is expected to catalyze government spending. “The ongoing pandemic has shown how a healthcare crisis can turn into an economic and social crisis,” noted the 2021-22 economic survey. It even added that health spending increased from Rs 2.73 lakh crore in 2019-20 (pre-Covid-19) to Rs 4.72 lakh crore in 2021-22 (Budget Traming), a 73 percent increase.