The numbers call for its complete overhaul

Arshad Shaikh studies the recent data released by the National Health Accounts (NHA). The data indicates a reduction in the Out of Pocket Expenditure (OOPE) as a share of total health expenditure (THE). This implies an increase in government spending on healthcare that may be construed as something positive. However, the numbers need to be taken with a pinch of salt. If we analyse the data further and compare it with global norms, we realise that we have a long way to go in catering to the health of all citizens in an equitable manner. India’s healthcare needs a complete overhaul and the NHA data only underscores that concern.

India’s insufficient spending on healthcare and our inadequate health infrastructure has always been an area of concern for those who believe in free universal healthcare. The National Health Accounts (NHA) under the Ministry of Health and Family Welfare comes out with a report every year on healthcare expenditures in India based on a global standard framework for producing health accounts. The latest NHA report for the year 2018-19 sheds light on many important indicators throwing up various issues for introspection, intervention and improvement.

The NHA team gives a disclaimer saying, “this report does not present the policy implications of healthcare expenditures” and that “policymakers, academicians, researchers, and program managers are free to draw inferences”.

However, this did not inhibit Dr. Mansukh Mandaviya – India’s Minister for Health & Family Welfare to assert in his ceremonial message in the report that – “the findings from the NHA 2018-19 reflects the positive impact of the efforts undertaken by the Government in achieving Universal Health Care (UHC) in the country.”

The Minister appears elated with the NHA numbers. For him – “The NHA 2018-19 estimates show a continuous decline in out of pocket expenditure as a share of Total Health Expenditure (THE) from 64.2% to 48.2% between 2013-14 and 2018-19. The Social Security Expenditure on health (including Government-financed health insurance and reimbursement to employees) has also increased as a share of THE from 6% to 9.6%. Government health expenditure as a share of THE has also increased from 28.6% to 40.6% between 2013-14 and 2018-19.”

He therefore deduces that – “This increase in Government spending on health will have implications in the form of a reduction in financial hardship endured by households.”

While the above conclusions may revive the spirits of the government, a closer look at the overall health scenario in the country will certainly tone down the misplaced euphoria over the conclusions drawn from the NHA data. Sample this – India is the second most populous country in the world.

According to the National Health Portal (NHP), “In India, nearly 5.8 million people (WHO report, 2015) die from NCDs (heart and lung diseases, stroke, cancer and diabetes) every year or in other words, one in four Indians has a risk of dying from an NCD before they reach the age of 70.”

Around 90% of our hospitals are privately run and about 70% are located in cities and urban areas. India was placed 154 out of 195 countries in the latest Healthcare Access and Quality (HAQ) study conducted by the Institute for Health Metrics and Evaluation (IHME).

The Covid-19 pandemic thoroughly exposed India’s poor health-infra and underscored the need for the government to become the primary player in the health sector. Universal healthcare under the private sector is a charade that should not be normalised if we cherish justice and equity.


OECD defines the OOPE on health as comprising “cost-sharing, self-medication and other expenditure paid directly by private households.” It means greater the OOPE, higher the burden on citizens to foot their own medical bills, with little or no help from the government.

India’s Economic Survey 2021 points out that India has one the highest out of pocket expenditures in the world. To understand the significance of OOPE, one may compare the numbers (% of current health expenditure) for Afghanistan (79.30%) and Canada (14.91%). India’s Economic Survey has suggested an increase in health spending by the government from 1% to 2.5% of the GDP. This is likely to reduce the OOPE from 65% to 30% of THE.

An important fact in the NHA report is that government health spending as a percentage of GDP reduced from 1.35% to 1.28% from 2017-18 to 2018-19. If we add government and private spending then it has reduced from 3.9% of GDP to 3.2%.

Typically, as we grow rich, our health expenditure should increase. Therefore, the fall in health expenditure is puzzling. The WHO guideline for OOPE is 15-20% of the country’s total health expenditure (THE). By that yardstick, India has still a long way to go. Even with the drop in OOPE, it was still a massive `2.87 lakh crore. This implies that people spent more than the government on healthcare.

Further, in India, the number of people seeking healthcare has reduced despite needing them. It is indicative of massive distress in the system. People need healthcare but are not availing of them, either because they know they cannot afford it or because it is too inaccessible.


Our current health expenditure is about `5.4 lakh crore. This amounts to 90.6% of the total health expenditure. Balance is spent on infrastructure, equipment, etc. The Centre’s share in current health expenditure was 11.71% while the state governments contributed 19.63%. Local bodies had a share of 1.01%. This comes to around `2.42 lakh crore.

Households and insurance contributions made the maximum share at 60.11%. If we look at where the money was spent, we find 34.5% went towards in-patient care, 18.9% for outpatient care, 3.5% for patient transport, 4.17% for lab and imaging services, 18.87% for prescribed medicines, 3.49% for over the counter (without prescription) medicine and 9.44% for preventive care. In terms of facilities, we spent 47.4% on primary care (GP-level), 31.7%, on secondary care (availing a specialist) and 14.9% on tertiary care (requiring surgery, etc.).

India’s public expenditure on healthcare (as a percentage of GDP) is woefully small when we compare it with countries such as Japan, France and Canada who spend around 10% of their GDP on health. There is an acute shortage of (government-run) functional healthcare centres in the country. In terms of Primary Health Centres (PHCs) the shortfall is 22% while in Sub Health Centres (SHCs) the shortage is 20%.

Adding to the deficit is the fact that only 7% of the SHCs and 12% of the PHCs meet the Indian Public Health Standards. It indicates that they exist only in name and are functionally deficient for lack of either doctors and nurses or the absence of the requisite medical equipment. Data shows that there is a 7% shortage of doctors in PHCs and a whopping 57% shortage at the Community Health Centres in rural areas. Thus rejoicing over reduced OOPE data is being hasty and unwise.

American Senator Bernie Sanders said this about his country but it applies to us as well – “Health care must be recognised as a right, not a privilege. Every man, woman and child in our country should be able to access the health care they need regardless of their income. The only long-term solution to America’s health care crisis is a single-payer national health care program.”

Similar Posts