Revisiting healthcare expenditures from 2019-2022, Health News, ET HealthWorld
New Delhi: The COVID-19 pandemic has highlighted the importance of repairing our airings. healthcare infrastructure, As a result, according to the Economic Survey of 2022, India’s public expenditure on healthcare was 2.1 per cent of GDP in 2022, up from 1.8 per cent in 2021 and 1.3 per cent in 2020. Countries like France, Japan, and Canada spend 10 per cent of their GDP on public healthcare, while neighbors like Pakistan and Bangladesh surpass us by spending over 3 per cent.
The Indian healthcare sector is expected to triple in size between 2016 and 2022, growing at a CAGR of 22 per cent to reach $372 billion in 2022, up from $110 billion in 2016. Health insurance companies too grew 13.3 per cent, recording a three- fold rise, growing at a CAGR of 22 per cent between 2016 and 2022 to reach $372 billion in 2022, up from $110 billion in 2016. But despite these splendid achievements, there are incendiary challenges as well. The pandemic has put the focus back on primary healthcare systems. For centuries, primary healthcare in India has been confined to the neighborhood family doctor. From baby boomers to generation X, a nearby family doctor was always around. But for gen Z (millennials), that has been replaced by big hospital chains. Healthcare professionals have a firm belief that this phenomenon of OPDs in big hospitals is becoming counterproductive due to a lack of diligence and scarcity of time. It is not only leading to a delayed response to a disease but is also the reason behind high out-of-pocket expenses (OOPE).
India stands among the highest in the world in terms of OOPE, with a whopping 63 per cent of the points. High OOPE on health is impoverishing some 55 million Indians annually, with over 17 percent of households incurring catastrophic levels of health expenditures every year, according to a World Health Organization (WHO) report from March 2022. This can lead to patients drifting towards alternative remedies that may not be scientific at all. ETHealthword takes a look at some of the most critical areas of the union budgetcovering the major heads of expenditure over the past couple of years.
Overall Union health budget trends since 2019 (pre-COVID vs post-COVID)
The Fifteenth Finance Commission, in its voluminous report titled, ‘Finance commission in COVID times—Report for 2021–26’, specifically identified critical areas in healthcare that need the government’s attention, including low investment, sharp inter-state variations in the availability of health infrastructure and outcomes, supply-side problems of doctors, paramedics, hospitals, and an inadequate number of healthcare centers like primary healthcare centers (PHCs), subcentres, and community health centers (CHCs). To achieve these targets, India needs to burn the candle at both ends in terms of increasing the overall capital expenditure in healthcare but also needs to have a focused strategy to meet the specific challenges as well.
The National Health Policy 2017 (NHP 2017) has proposed the ramping up of public health expenditures to 2.5 per cent of GDP by 2025. In 2019-20, the centre’s expenditure on healthcare was Rs 64,258 crore, which is around 1.4 per cent of the country’s gross domestic product (GDP). The percentage of healthcare in GDP rose to 1.8 per cent, with the center spending Rs 80,694 crores in the budget for 2020–21. Following that, the GDP increased by 0.3 per cent in the years 2021–22, to Rs 86,001 crores (accounting for 2.1 per cent of the GDP). The 2022–23 budget estimate (BE) stands at around Rs 86,201 crore. The annualized change in budget expenditure is approximately 8.94 per cent (from actuals 2019–20 to BE 2022–23). The report of the Finance Commission recommends unconditional funds of Rs 1 lakh crore for the health sector between 2021 and 2026.
Lack of attention towards primary healthcare
Primary healthcare acts as a foremost protection layer against the spread of diseases, both on an individual and community level. Although in India, health is a state subject and the responsibility for primary healthcare vests with the states. Since it is a unitary federal system, the central government also tries to focus on primary healthcare through its two initiatives: the National Health Mission (NHM) and the Pradhan Mantri Aayushman Bharat Health Infrastructure Mission (PM ABHIM). There is a three-tiered system in primary healthcare, including sub-centres (SCs), primary health centers (PHCs), and community health centers (CHCs). According to the findings of the Rural Health Statistics, India still has a long way to go before standardized SCs, PHCs, and CHCs become a reality. The center has set a target in the 2017-18 Union Budget to convert existing SCs and CHCs into 150, 000 health and wellness centers (HWCs) by 2022. As of now, we are stuck at around 90,000 HWCs. The Fifteenth Finance Commission has recommended intensifying the focus on primary healthcare by increasing the budgetary allocation to Rs 70,000 crore at the primary level between 2021 and 2026.
Combining the budget of both NHM and PM ABHIM for years 2022–2023, the budget estimates for which stand at Rs 42,846 crore, which is far less than what the Finance Commission envisaged. The 2021–22 budget’s revised estimates for both schemes combined were Rs 35,457 crore, an overall 82 per cent less than 2022–23 BE. Before 2021, there was no PM ABHIM; the NHM solely focused on primary healthcare. The actual expenditures for the NHM in 2020 and 2019 were Rs 37,080 crore and Rs 31,745 crore, respectively.
High out-of-pocket expenditures vs lower penetration of health insurance
India’s out-of-pocket expenditure (OOPE) is considerably high if we compare it with the rest of the world. Although it has come down substantially, as per the National Health Estimates (NHE) 2018–19, from about 64.2 per cent in 2013–14 to 48.2 per cent in 2018–19, the road is still ahead to achieving the World Bank’s global average of around 18.1 per cent. According to the WHO’s India health system review report, high OOPE impoverishes around 55 million Indians annually. According to the Economic Survey 2020–21, out-of-pocket healthcare costs in India account for 60 percent of all public health spending, which is one of the highest in the world.
Intensified capital expenditure on public health insurance can be one way to take on this problem. The penetration of public health insurance in India is very low. According to the NITI Aayog report 2021 titled ‘Health Insurance of India’s Missing Middle’, a population of around 40 crore individuals is still deprived of any health insurance financial protection. The Indian government, through its Ayushman Bharat—Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), is trying to proliferate public health insurance in India.
The budgetary allocation for the AB-PMJAY scheme has consistently been above Rs 6,000 crore net since it replaced the Rashtriya Swasthya Suraksha Bima Yojana in 2019. However, due to lower penetration of public health insurance and poorer utilization of funds, the scheme gets downsized every year by 50 per cent in the revised estimates. The Fifteenth Finance Commission’s report on Ayushman Bharat (2019) anticipated the demand for and costs associated with PMJAY over the following five years. According to the report, the overall PMJAY costs for 2019 (centre and states) might range from Rs 28,000 crore to Rs 74,000 crore.
Human resources and government investment in institutions
The targets set by the WHO in terms of the doctor-to-patient ratio are 1 doctor for every 1000 patients. The Government of India (GoI) controversially claimed in parliament in December 2021 that India’s doctor-to-patient ratio had significantly improved to 1 doctor for every 834 patients by including 5.65 lakh AYUSH doctors alongside allopathic practitioners. Although figures from 2019 suggest that India’s doctor-to-patient ratio stood at 1:1511.
Entrusted with the objective of correcting regional imbalances in the availability of affordable and reliable tertiary healthcare services, the Pradhan Mantri Swasthya Suraksha Yojana (PMSSY), introduced in 2003, supervises the formation of institutions like AIIMS and upgrades certain state government hospitals. The scheme covers 20 new AIIMS and 71 state government hospitals. PMSSY has been given Rs 10,000 crore for 2022–2023. This is a 35 per cent rise from the revised estimates for 2021–2022 (Rs 7,400 crore). In 2020–21, the revised estimate for PMSSY was Rs 7,517 crore, 25 per cent higher than the budget estimate of Rs 6,020 crore. Apart from this, there is an overall nine per cent increase in the budget allocation to autonomous institutions like AIIMS, New Delhi, the Postgraduate Institute of Medical Education and Research, Chandigarh, and the Jawaharlal Institute of Postgraduate Medical Education and Research, Puducherry, from 2020–21 actuals (Rs 12,197 crore) to 2022–23 budget estimates (Rs 15,200 crore).
National AIDS and STD Control Programme, Family Welfare Scheme, and COVID-19
Beginning in the form of ‘sero-survillance’ in 1985, India’s response to diseases like AIDS became a full-blown measure with the passage of the HIV and AIDS (Prevention and Control) Bill, 2017, and the launch of the ‘Test and Treat’ policy for HIV patients in April 2017. The Union Cabinet continued NACP Phase V, a Central Sector Scheme, from April 1, 2021, to March 31, 2026, with an outlay of Rs 15471.94 crore. The actual expenditure on the NACP program in 2020–21 was Rs 2,815 crore. A year later, it was increased to Rs 2,350 crore, and in 2022–23, the scheme was allocated Rs 2,623 crore. The rate of change from 2020 to 2022 was 11.6 per cent positive.
The Family Welfare Scheme also gets major attention from the centre. It is an umbrella scheme covering several initiatives run by the government, ie, the Urban Family Welfare Program, the urban revamping scheme, the green card scheme, the rural family welfare center etc. Budgetary provisions for Family Welfare Schemes have not changed significantly since actual spending in 2020-21.
In 2020–21, the actual spent was Rs 2,815 crore; thereafter, in 2021–22, it was around Rs 2,350 crore; and finally, in the previous budget, the BE was set at Rs 2, 623 crore.
The central government allocated around Rs 11, 941 crore for COVID-19-related initiatives, which witnessed an over Rs 5000 crore increment to about Rs 16, 545 crore. As the pandemic started to slowly fade out, the budgetary allocation came heavily down to Rs 226 crore in the Union Budget 2022–23.
This year there may not be any major attribution of funds towards the COVID-19 counter-initiatives; Experts believe that the government is going to use these funds for some other major purposes.