ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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National Health Accounts, 2018–19

A deficit in healthcare and its skewed availability across states remain major limitations.

A deficit in healthcare and its skewed availability across states remain major limitations.

The National Health Accounts estimate for 2018–19 highlights the working of the sector, its changing structure and also the wide disparity in the level of healthcare spending across states. The major players in the healthcare sector are the private- and government-owned hospitals and clinics. While the former provides around a third of the total healthcare spending nationally, the latter accounts for a quarter. The share of the pharmacies in the healthcare sector was slightly higher than one-fifth. In contrast, the diagnostic laboratories and administrative agencies together accounted for less than a tenth of the healthcare spending. Similarly, the most important healthcare function is inpatient curative care, which accounts for a third of the total spending. Medicines, and healthcare goods and outpatient curative care each accounted for around one-fifth of the total healthcare spending. The share of spending on preventive healthcare was just around one-tenth.

A cause for concern is the recent trends in healthcare expenditure. At the national level, the share of the total health expenditure has declined by around one-fourth in the last decade and a half. Between 2004–05 and 2018–19, the total health expenditure came down from 4.2% to 3.2% of the gross domestic product (GDP). This is in sharp contrast to worldwide trends where the share of health spending in global GDP has doubled over the last two decades, creeping up close to double digits.

Surprisingly, despite the declining share of health expenditure in the overall economy there have been some positive trends. A major improvement has been the increasing share of government health expenditure in the total health expenditure. The government’s share has almost doubled to 40.6% in the last decade and a half. This has reduced the share of out-of-pocket (OoP) expenses or the people’s own personal spending on healthcare from more than two-thirds to less than half during the period.

The current share of OoP expenditure on healthcare in India is more in line with that in the low-income countries. Unlike that in high-income countries, where the government is the dominant player in healthcare spending, OoP finances remain the primary source of health spending in low-income countries. Nationally, the fall in the share of OoP expenses has also been facilitated by the increase in social security spending on healthcare programmes and the rising share of private health insurance in healthcare spending. While the share of social security spending in the total healthcare spending is now around a tenth of the total, that of insurance has gone up by 6.6%.

However, the trends in the total per capita spending on healthcare are not very encouraging. While the per capita total health spending at current prices has gone up close to fourfold in the last decade and a half, the increase in the real per capita total health spending has been rather modest. Though it rose close to two-thirds during the period, the real per capita spending has been declining in recent years. The impact of these negative trends in healthcare spending at the national level has been exacerbated by the skewed healthcare spending in different states.

The National Health Accounts show that the relative share of the total healthcare spending in the major states varied around threefold: from a low of 1.6% of the gross state domestic product to a high of 4.9%. The disparities in the per capita total healthcare spending were much larger with the differences ranging from `1,517 in Bihar to a maximum of `9,871 in Kerala, that is, by a factor of seven. The highest total per capita spending on healthcare was generally in the southern states, whereas it is relatively much lower in the north and eastern states.

Another major highlight of the health accounts is the wide variation in the levels of per capita spending on healthcare by various state governments. While the per capita government spending on healthcare is at a higher `2,000 to `4,000 band in Tamil Nadu, Uttarakhand, Kerala, and Himachal Pradesh it was less than `1,000 in Bihar and Uttar Pradesh (UP).

The share of OoP spending in the total healthcare spending also differed substantially across states. While it accounted for around two-thirds of the total healthcare spending in Punjab, Kerala, West Bengal, and UP, its share was just around one-third in Assam, Uttarakhand, and Karnataka, thus limiting individual burdens. Similarly, the per capita OoP expenses varied from a low of `811 in Bihar to a maximum of `6,772 in Kerala. Both the limited allocation of government funds for healthcare and the higher demand for healthcare services have contributed to the larger OoP spending in many of the states.

To sum up, the National Health Account numbers show that despite the marginal gains, like the increasing share of government spending and the declining share of OoP expenditures, the Indian healthcare sector still has a long way to go to catch up with the global benchmarks. The huge disparities in the government spending on healthcare and OoP expenses in the states add to the vulnerabilities. The persistence of communicable diseases and the growing burden of non-communicable diseases call for government spending in the healthcare sector. Innovative programmes also have to be devised to incentivise healthcare spending in the laggard states. The regulatory regime also needs to be strengthened so that all healthcare service providers comply with national benchmarks and provide decent healthcare facilities at competitive prices.



Updated On : 26th Sep, 2022
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