We need a leap in healthcare spending Editorial 7th Feb’19 TheHindu

Headline : We need a leap in healthcare spending Editorial 7th Feb’19 TheHindu

Details :

Public health spending in India still very low:

The Central and State governments have introduced several innovations in the healthcare sector in recent times.
However, public health spending is only 1.15-1.5% of GDP.
Allocation for healthcare is merely 2.2% of the Budget.

High out-of-pocket expenditure (OOPE):

The out-of-pocket expenditure on health (where patients pay out of their own pockets) in India is very high at 67%.

Low 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.
As per some estimates, per capita spend on health may have risen to about Rs. 1,500 by 2018.
- In dollar terms: This amounts to about $100 when adjusted for purchasing power parity (PPP).
Despite the doubling of per capita expenditure on health over six years, the figure is still abysmal.
Per capita spending on health in the Budget in India is Rs. 458 (adjusting for purchasing power parity, this is about $30).

Comparision with other countries:

The U.S.’s health expenditure is 18% of GDP, while India’s is still under 1.5%.
- The U.S. spends $10,224 per capita on healthcare per year (2017 data). Federal Budget spending per capita on health in the U.S. is more than $3,000.
Healthcare costs in the US are too high but even other comparable developed countries spend half as much per capita as the US ($4,000-$5,000 per capita in the OECD countries).
This is much much more than what India spends.

Interim Budget falls short in the health sector in many ways

Health expenditure as share of total remained same as earlier:

The Interim Budget 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 Rs. 6,400 crore allocated to PMJAY allocated for implementation of the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY) is not enough.

Low resources for programme on non-communicable diseases (NCDs):

The funding for non-communicable diseases programme of the National Programme for Prevention and Control of Cancer, Diabetes, Cardiovascular Diseases and Stroke (NPCDCS) is already low and has been further reduced.
There is no resource allocation for preventive oncology, diabetes and hypertension.
Prevention of chronic kidney disease, which affects 15-17% of the population, is not appropriately addressed.
Same is the case for the National Tobacco Control Programme (NTCP) and Drug De-addiction Programme (DDAP).
Lack of focus on screening and prevention on NCDs leads to huge private expenditure:
- Example of cancer:
  - Due to lack of focus in preventive oncology in India, over 70% of cancers are diagnosed in stages III or IV. Treatment of advanced cancer costs three-four times more than treatment of early cancer. Also, cure rate is low and the death rate is high at advanced stages.
  - The standard health insurance policies cover cancer but only part of the treatment cost. As a consequence, either out-of-pocket expenditure goes up or patients drop out of treatment.
- Example of kidney disease:
  - Chronic kidney disease leads to enormous social and economic burden for the community at large, in terms of burgeoning dialysis and transplant costs.
  - Costs will further rise and will not be sustainable unless we reduce chronic kidney disease incidence and prevalence through screening and prevention.

Ayushman Bharat

In 2018, 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.
Low resource allotment for these centers:
- Under the National Urban Health Mission, an estimated Rs. 250 crore has been allocated for setting up health and wellness centres.
- Under the National Rural Health Mission, Rs. 1,350 crore has been allocated for the same.
- This amounts to an allocation of less than Rs. 1 lakh per year for each of the wellness centres.
- This is a meagre amount.
Raise resources for these centers through higher taxes on sin goods:
- NITI Aayog has proposed higher taxes on tobacco, alcohol and unhealthy food – the resources raised could be used to revamp the public and preventive health system.
- However, the Interim Budget has not considered this proposal.
- Adding tax on tobacco and alcohol, to fund NCD prevention strategies at health and wellness centres, should be considered by the government.

PMJAY will provide a cover of up to Rs. 5 lakhs per family per year, for secondary and tertiary care hospitalization, for about 50 crore beneficiaries.
It will help reduce catastrophic expenditure for hospitalizations,
Comprehensive disease management must be done:
- The 1,354 packages for various procedures in PMJAY must be linked to quality.
- For various diseases, allocation should be realigned for disease management over a defined time period, not merely for episodes of care.

Conclusion – Need more public health expenditure, including on PMJAY:

Ayushman Bharat-PMJAY, a major innovation in universal healthcare that is being rolled out, will help reduce out-of-pocket expenditure in India.
The Rs. 6,400 crore allocated to PMJAY is not enough. The innovation in the scheme must be matched with a quantum leap in funding.
Improvement in health leads to faster GDP growth, since a healthy workforce contributes to productivity.
It is imperative to invest more for the long-term health of the nation.
The government’s goal, for a while, has been to increase public health spending to 2.5% 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.

Importance:

GS Paper II: Social Issues

Section : Editorial Analysis