India Health Expenditure

Why in News?

The National Health Accounts Estimates for 2020-21 and 2021-22 was released recently by the Union Health Ministry.

Total Health Expenditure
Government Health Expenditure (GHE)	Expenditures from Union Government, State Governments, Rural and Urban Local Bodies including quasi-governmental organisations and donors in case funds are channeled through Government organisations.
Out-of-pocket expenditure (OOPE)	Expenditures directly made by households at the point of receiving health care.
Social Security Expenditure (SSE)	It includes government-funded health insurance (both Center and State) and medical reimbursement to government employees.
Private Health Insurance (PHE)	Spending through health insurance companies where households or employers pay a premium to be covered under a specific health plan.

Health Spending

Decline in OOPE - It declined to 39.4 % of total health expenditure (THE) in 2021-22 from 48.8 % in 2017-18.

National Health Policy aims to reduce OOPE as a proportion of total health expenditure to 35 % by financial year 2025-26 (FY26).

GHE OOPE

National Health Account

National Health Account provides a systematic description of the financial flows in India’s health system by different sources.
Released by Ministry of Health and Family Welfare.
It shows how the money is spent, how healthcare is provided, and the nature of healthcare services that are used.
The NHA estimates are based on the globally accepted framework of ‘A System of Health Accounts (SHA 2011), 2011’ which facilitates inter-country comparisons.
SHA 2011 is developed by World Health Organization (WHO).

Increased government contribution - Government Health Expenditure (GHE) rose marginally from 1.35 % of GDP, in 2017-18 to 1.84 % in 2021-22.

GHE

National Health Policy has targeted 2.5 % of GDP for public health expenditure by 2025.

Share of government health expenditures in total health expenditures has also shown a significant increase from 29.0 % in 2014-15 to 48.0 % in 2021-22.
Increased per capita GHE - In per capita terms, GHE has tripled, from Rs. 1,108 to Rs. 3,169 between 2014-15 to 2021-22.
Expanded private health insurance - Coverage of private health insurance rised from 5.8 % in 2017-18 to 7.4 % in 2021-22.
Increased social security spending – The proportion of total health expenditure allocated to social health insurance programs has increased from 5.7 % in 2014-15 to 8.7 % in 2021-22.
Government Health Schemes - More than Rs 1 lakh crore savings have accrued from the Ayushman Bharat PMJAY.
Free Dialysis scheme, launched in 2015-16 have benefited 25 lakh people.

Universal Health Coverage - decrease in OOPE is a constructive sign of realising Universal Health Coverage (UHC) as postulated in the National Health Policy, 2017.
Prevents financial ruin - Reduced OOP protects against Unexpected medical expenses can lead to bankruptcy or severe debt.
Enables savings - With lower healthcare costs, individuals can allocate more of their income towards savings or other financial goals.
Increases access to care - Lower costs can encourage people to seek preventive care and timely treatment, leading to better health outcomes.
Reduces delayed care - Reduced OOPE can encourage people to seek treatment when needed without worrying about financial constraints.
Reduces poverty - Reducing OOPE costs can help alleviate poverty and improve overall societal well-being.
Increases productivity - Reduced OOPE can contribute to a healthier workforce and a stronger economy thus improving the productivity.

Expand health insurance programmes to cover outpatient and preventive health services.
Include people above the poverty line also under the social security schemes to achieve universal coverage.
Cover the whole household irrespective of the number of members living in the household.
Enrol urban poor e in health insurance programmes without at the earliest.