The National Health Account Estimates 2019-20 report recently released shows that the government spending on healthcare in India has been consistently increasing, coupled with a decline in out-of-pocket expenditure by people for their healthcare needs. This essay will discuss the key findings of the report and its concerns.
What is a National Health Account?
The National Health Accounts is a process through which countries monitor the flow of money in their health sector. The three major categories of health expenditure are Health Care Functions, Health Care Providers, and Health Care Financing Schemes. Public expenses include tax, mandatory health insurance, public donor funding, and earmarked taxes. Private expenses include direct household expenses, non-governmental organization, private insurance, and health expenses by companies.
Key Findings
Government Spending: The government spending on healthcare has been on the rise. The money spent by the government on healthcare as a percentage of GDP has increased from 1.13% in FY 2015 to 1.35% in FY 2020. Even this small percentage increase in the government’s health kitty has translated into nearly double the money spent on each person. The per capita health spend of the government in this period has increased from Rs 1,108 to Rs 2,014. The government’s share in the total money spent on healthcare in the country went up by a 12.4 percentage point between FY 2015 and FY 2020, increasing from 29% to 41.4%.
Private Spending: Money spent by people from their own pocket on healthcare has been going down. The report shows that 47.1% of the total spending on healthcare in FY2020 came directly out of people’s pockets. This is a 15.5 percentage point drop from 62.6% of the spend coming out-of-pocket in FY 2015.
Sector-wise Spending: A major chunk of the government’s health spend was in the primary sector. Out of the total spending by the government on healthcare in FY 2020, 55.9% went to primary care, 29.6% went to secondary care, and 6.4% went to tertiary care.
Social Security Expenditure: There has been a consistent increase in social security expenditure by the government, which increased from 5.7% of the total spending on health in FY 2015 to 9.3% in FY 2020.
Spending on Insurance: There has been an increase in spending on privately purchased health insurance as well. Privately purchased health insurance made up for only 3.9% of the total health expenditure in FY 2015, which increased to 7.72% in FY 2020. The government financed health insurance spending also went up from 3.8% of the total money spent on healthcare in FY 2015 to 6.37% in FY 2020.
Health Spending by States: There was a need for the states to increase their contribution towards healthcare and achieve the target set by the National Health Policy 2017, which says that 8% of states’ budget should go towards healthcare. Right now except for one or two states, the target of 8% hasn’t been achieved. Only two big states and three of the smaller ones have crossed the 8% target in FY 2020 – Delhi (contributing 18.7% of its total spending on health), Kerala (8%), Puducherry (10.5%), Meghalaya (8.9%), and Goa (8.7%).
Important Points:
🏥 The National Health Account is a process to monitor the flow of money in a country’s health sector.
💰 The three major categories of health expenditure are health care functions, health care providers, and health care financing schemes.
👥 Government spending on healthcare has been on the rise. The money spent by the government on healthcare as a percentage of GDP has increased from 1.13% in FY 2015 to 1.35% in FY 2020.
💸 Money spent by people from their own pocket on healthcare has been going down. The report shows that 47.1% of the total spending on healthcare in FY 2020 came directly out of people’s pockets. This is a 15.5 percentage point drop from 62.6% of the spend coming out-of-pocket in FY 2015.
📊 A major chunk of the government’s health spend was in the primary sector. Out of the total spending by the government on healthcare in FY 2020, 55.9% went to primary care, 29.6% went to secondary care, and 6.4% went to tertiary care.
👴🏼 There has been a consistent increase in social security expenditure by the government, which increased from 5.7% of the total spending on health in FY 2015 to 9.3% in FY 2020.
🏥 There has been an increase in spending on privately purchased health insurance as well. Privately purchased health insurance made up for only 3.9% of the total health expenditure in FY 2015, which increased to 7.72% in FY 2020.
🌐 The government financed health insurance spending also went up from 3.8% of the total money spent on healthcare in FY 2015 to 6.37% in FY 2020.
💰 There was a need for the states to increase their contribution towards healthcare and achieve the target set by the National Health Policy 2017, which says that 8% of states’ budget should go towards healthcare.
👀 The increase in government health expenditure as a percentage of GDP also takes into account capital spending (money spent on developing infrastructure). Other countries look at only the current health expenditure, which for India stands at 1.04% calculated based on this report.
📉 The marginal increase in percentage could be a factor of a shrinking economy – GDP growth was slow in FY 2020.
Why In News
Recently released National Health Account Estimates for 2019-20 indicate that the government spending on healthcare has consistently risen, while people’s out-of-pocket expenses on healthcare needs have declined.
MCQs about National Health Account Estimates 2019-20
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Which of the following is NOT one of the three major categories of health expenditure?
A. Health Care Functions
B. Health Care Providers
C. Health Care Financing Schemes
D. Health Care Standards
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Which state(s) achieved the target of 8% of their budget going towards healthcare in FY 2020?
A. Delhi
B. Kerala
C. Puducherry
D. All of the above
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According to the National Health Account Estimates 2019-20, what has been the trend in government spending on healthcare in India?
A. It has decreased.
B. It has remained stable.
C. It has shown a consistent increase.
D. It has been unpredictable.
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