1st in 15 years: Govt health spend falls as percentage of GDP

Government

expenditure

on health after rising steadily from 2004-05 to 2017-18 as a percentage of GDP has fallen for the first time in this period to just under 1.3% in 2018-19, just released data from the

National Health Accounts

shows. Total expenditure on health, which includes what families and insurers spend, has declined over this 15-year period from 4.2% to 3.2% of GDP.

Expenditure by people on healthcare from their own pockets came down from almost 70% of total health expenditure in 2004-05 to 48% by 2018-19, while government health expenditure has increased from 22.5% to 40.6% in the same period. Most of this is accounted for by spending by the state governments as health is largely a state subject.

Times View

Providing health and education are two non-negotiable pillars of any welfare state. Government spending at 3% of GDP on healthcare is a widely accepted norm. Even the 2021 Economic Survey recommended that government spending on health should rise to at least 2.5% to 3%. That it is far from this target is worrying. The government must ensure that the trend is reversed.

The state which spent the highest proportion of GSDP on health (1.7%) and the highest government spending per capita on health (Rs 3,604) was Himachal Pradesh and the state with the highest out of pocket expenditure as a percentage of GDP (3.5%) and as a percentage of the total health expenditure (71.3%) was UP.

Government spending on health per person was Rs 1,815 while out of pocket expenditure per capita was Rs 2,155. Though overall government spending has increased with the proportion of out-of-pocket spending shrinking, as a percentage of the GDP, government health expenditure was just 1.2% in 2018-19, down from 1.3% in 2017-18. Private health insurance expenditure as a percentage of total health expenditure jumped from just 1.6% in 2004-05 to 6.6% by 2018-19.

Government hospitals accounted for 17.3% of current health expenditure or recurrent expenditures for healthcare purposes excluding all capital expenditures, while private hospitals accounted for 28.7%. The biggest chunk of current health expenditure was pharmaceuticals (33.8%), including prescription medicines as well as over the counter medicines. Expenditure on traditional, complementary, and alternative medicine was 4.2% of current health expenditure. Inpatient curative care accounted for 34.6% and outpatient curative care accounted for 18.9%, while preventive care accounted for just 9.4%.

The state with the highest spending per capita was Kerala (Rs 9,871) with most of that being accounted for by people spending from their own pocket (Rs 6,772). The least spending per capita on health was in Bihar, Rs 1,517.

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