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We need a leap in healthcare spending

The Central and State governments have introduced several innovations in the healthcare sector in recent times, in line with India’s relentless pursuit of reforms. However, while the government’s goal is to increase public health spending to 2.5% of GDP, health spending is only 1.15-1.5% of GDP. To reach its target, the government should increase funding for health by 20-25% every year for the next five years or more. While the Interim Budget is responsive to the needs of farmers and the middle class, it does not adequately respond to the needs of the health sector. The total allocation to healthcare is Rs. 61,398 crore. While this is an increase of Rs. 7,000 crore from the previous Budget, there is no net increase since the total amount is 2.2% of the Budget, the same as the previous Budget. The increase roughly equates the Rs. 6,400 crore allocated for implementation of the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY). Per capita spending on health According to the National Health Profile of 2018, public per capita expenditure on health increased from Rs. 621 in 2009-10 to Rs. 1,112 in 2015-16. These are the latest official numbers available, although in 2018 the amount may have risen to about Rs. 1,500. This amounts to about $20, or about $100 when adjusted for purchasing power parity. Despite the doubling of per capita expenditure on health over six years, the figure is still abysmal. To understand why, let’s compare this with other countries. The U.S. spends $10,224 per capita on healthcare per year (2017 data). A comparison between two large democracies is telling: the U.S.’s health expenditure is 18% of GDP, while India’s is still under 1.5%. In Budget terms, of the U.S. Federal Budget of $4.4 trillion, spending on Medicare and Medicaid amount to $1.04 trillion, which is 23.5% of the Budget. Federal Budget spending per capita on health in the U.S. is therefore $3,150 ($1.04 trillion/ 330 million, the population). In India, allocation for healthcare is merely 2.2% of the Budget. Per capita spending on health in the Budget in India is Rs. 458 (Rs. 61,398 crore/ 134 crore, which is the population). (Medicare and Medicaid come under ‘mandatory spending’ along with social security.) Adjusting for purchasing power parity, this is about $30 — one-hundredth of the U.S. Admittedly, this runaway healthcare cost in the U.S. is not to be emulated, since comparable developed countries spend half as much per capita as the U.S. Yet, the $4,000-$5,000 per capita spending in other OECD countries is not comparable with India’s dismal per capita health expenditure. The rate of growth in U.S. expenditure has slowed in the last decade, in line with other comparable nations. The Rs. 6,400 crore allocation to Ayushman Bharat-PMJAY in the Interim Budget will help reduce out-of-pocket expenditure on health, which is at a massive 67%. This notwithstanding, per capita Budget expenditure on health in India is among the lowest in the world. This requires immediate attention. Health and wellness centres Last year, it was announced that nearly 1.5 lakh health and wellness centres would be set up under Ayushman Bharat. The mandate of these centres is preventive health, screening, and community-based management of basic health problems. The mandate should include health education and holistic wellness integrating modern medicine with traditional Indian medicine. Both communicable disease containment as well as non-communicable disease programmes should be included. An estimated Rs. 250 crore has been allocated for setting up health and wellness centres under the National Urban Health Mission. Under the National Rural Health Mission, Rs. 1,350 crore has been allocated for the same. The non-communicable diseases programme of the National Programme for Prevention and Control of Cancer, Diabetes, Cardiovascular Diseases and Stroke has been allocated Rs. 175 crore, from Rs. 275 crore. Allocation to the National Tobacco Control Programme and Drug De-addiction Programme is only Rs. 65 crore, a decrease of Rs. 2 crore. The allocation for each of the wellness centres is less than Rs. 1 lakh per year. This is a meagre amount.

Source : https://www.thehindu.com/todays-paper/tp-opinion/we-need-a-leap-in-healthcare-spending/article26198678.ece

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