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View: Taking good care of healthcare


Even as the Omicron variant of the coronavirus is forcing India to take new measures – keeping the economy open while ensuring Covid protocols, and vaccination reaching all, and the availability of booster shots for the most vulnerable in the near future – on Monday, GoI released the National Health Accounts (NHA) Estimates for India 2017-18. The National Health Policy (NHP) 2017 emphasises on improving the efficiency, equity, accessibility, affordability, quality and safety of public health facilities, with the goal of achieving universal health coverage.

For this purpose, the Indian health system required a robust mechanism with a multidisciplinary approach towards health financing. This would provide policymakers with evidence for future strategies and investments. Which is where the NHA steps in. The National Health Systems Resource Centre (NHSRC), designated as the NHA Technical Secretariat (NHATS) in 2014 by the health and family welfare ministry, has been producing NHA estimates since 2013-14. It uses an accounting framework based on the internationally accepted System of Health Accounts 2011, provided by the World Health Organisation (WHO).

NHA estimates are not only used by the WHO in its Global Health Expenditure Database but also by India’s annual Economic Survey, NITI Aayog and the Reserve Bank of India (RBI), among others. The latest NHA estimates for 2017-18 provide intertemporal comparison of health financing indicators based on total health expenditure, which accounts for both current and capital expenditures. With government expenditure exhibiting an increasing trend and out-of-pocket expenditure (OOPE) registering a decline, the steady move towards achieving NHP 2017’s target of 2.7% of GDP health expenditure by 2025 seems on course.

The 2017-18 estimates saw government share in total health expenditure rise to 40.8%, compared to 22.5% in 2004-05. The narrative was not only limited to the government spending more, but it was also about spending it the right way. The current focus is on primary and secondary care expenditure, the former at 54.7%, up from 51% in 2013-14, the latter growing from 23% to 31.5%. Early intervention not only quickly improves the population’s health, but also prevents easily treatable illnesses from developing into complex and costly situations.

OOPE has come down from 69.4% in 2004-05, and 58.7% in 2016-17, to 48.8% in the 2017-18 estimates. The slight methodological differences in collection of a complete year’s data with a larger sample size has provided more robust estimates as compared to earlier rounds of National Sample Surveys (NSS). So, an important reason for the dip in OOPE can be an increasing utilisation of government facilities.

An improved quality of services, initiatives like the Free Drugs and Diagnostics Service initiative and Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP), have resulted in increased usage of public health facilities between NSS rounds of 2014 and 2017-18, for outpatient care (from 26% to 30%), hospitalisation (from 38% to 42%) and childbirth (from 64% to 69%). This shows a growing trust in the public healthcare system.

The decrease in external funding for health also comes as a sign of India moving increasingly towards economic self-reliance. External funding of total health expenditure now stands at 0.5%, compared to 2.3% in 2004-05 and 0.7% in 2014-15. The share of social security expenditure, which includes government-funded insurance programmes, increased to 8.9% in 2017-18 from 7.3% in 2016-17 and 4.2% in 2004-05. The private health insurance expenditure has also continued its rising trend, although with a low trajectory at 5.8%. The growing span of government insurance is an indicator of the government playing its part in healthcare even before the launch of Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) in 2018.

The NHA 2017-18 estimates still depict the challenge of households being the main source of healthcare financing, with an expenditure of ₹3,09,680 crore, 61.7% of the total current expenditure of ₹5,01,760 crore. However, with the current trends of reducing OOPE and increasing health expenditure, prioritising primary and secondary care, AB-PMJAY, India seems to be on the right track to address these challenges.

With India being a signatory to the UN General Assembly’s 2015 Sustainable Development Goals (SDGs), it is of paramount importance that its citizens have access to competitive and cost-effective healthcare. The NHA estimates indicate a sturdy move towards such comprehensive healthcare. With the total government expenditure on health having increased from 1.15% of GDP in 2013-14 to 1.35% within five years, universal health coverage looks well within sight.



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