The government spending on healthcare has been increasing consistently with its share of the country’s total health spending jumping up significantly by six percentage points in 2021-22 over the previous year.
This is evident from the National Health Accounts Estimates released recently. For nearly nine years, the report has been tracking how much the country spends on healthcare, how much of it is spent by the government, and importantly what it is spent on. So what are takeaways?
HAS MORE SPENDING REDUCED OUT-OF-POCKET EXPENDITURE?
There is a decline in out-of-pocket expenditure or what people spend by themselves for accessing healthcare. As a percentage of the country’s total spending on health, it has reduced from 48.8 per cent to 39.4 per cent in the last five years. It has gone down by five percentage points in just one year. The government’s aim is to reduce this spending to a level that people do not face catastrophic health costs.
HOW MUCH HAS THE GOVERNMENT SPENT?
The government’s share in the country’s total health expenditure has increased from 40.8 per cent to 48 per cent over the last five years, increasing by 5.2 percentage points in one year. The per capita government health expenditure has nearly doubled in the last five years, increasing from Rs 1,753 in 2017-18 to Rs 3,169 in 2021-22.
While the government is yet to achieve the target it set for itself of spending 2.5 per cent of its GDP on healthcare by 2025, there has been a consistent increase in health spend. “The government health expenditure as a proportion of GDP has increased from 1.35 per cent to 1.8 per cent over the last five years. This shows the government’s commitment to improving health services,” said Dr VK Paul, member, NITI Aayog (health).
Most importantly, the decrease in out-of-pocket spending has happened hand-in-hand with the increase in government spending. One of the biggest concerns that experts raised in previous years was that out-of-pocket spending was declining faster than the government spending increasing, meaning there was a distress in the system — people who needed health services were not accessing it.
WHAT ABOUT AYUSHMAN BHARAT?
The money spent on the government-financed insurance scheme — including Ayushman Bharat and other schemes like CGHS and ECHS — also shot up in 2021-22, according to the report. The government spending on insurance schemes went up from nearly Rs 13,000 crore during the two previous years to Rs 20,808 crore in 2021-22. The last time such a jump was seen was in 2018-19 — around the time when Ayushman Bharat insurance scheme was rolled out — when it increased to over Rs 12,000 crore from Rs 9,446 crore recorded a year before.
The spending on private insurance cover has also been increasing steadily — from 5.8 per cent of total health spend in 2017-18 to 7.4 per cent in 2021-22.
WHERE ELSE HAS THE SPENDING BEEN ON?
In-patient care accounted for 37.9 per cent of the current health expenditure — which excludes any capital costs for infrastructure development and other activities. The cost of medicines accounted for over 18 per cent of the current health expenditure while laboratory testing and imaging accounted for 3.3 per cent. The spending on preventive healthcare made up for 13.5 per cent of the current health expenditure in 2021-22, according to the report.
