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
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.
- Example of cancer:
- Primary healthcare – Health and wellness centres:
- 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.
- Secondary and tertiary healthcare
- 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.
GS Paper II: Social Issues