Investing in health

Updated - December 04, 2021 11:06 pm IST

Published - November 18, 2011 12:28 am IST

The High Level Expert Group of the Planning Commission on Universal Health Coverage for India has laid out a clear road map: it is to provide access to affordable, accountable, and appropriate health services for all citizens in a meaningful time frame. Free India adopted the goal of preventive and curative care for all, as recommended by the Bhore Committee in 1946. But it faltered and failed to raise public spending. What the expert group chaired by Dr. K. Srinath Reddy proposes is far-going reform in several areas. On funding, it puts the onus on the government to mobilise the resources necessary, relying mainly on general taxation; complementary funds would come in the form of mandatory deductions for health care from salaried individuals and tax payers. Country-level policies oriented towards equity and free, universal access to health care favour such a financial model. This is also logical, considering that health should be viewed as a public and merit good available to the entire population. India's approach to public spending on health needs a radical change. It has a pathetic record of devoting a mere 1.2 per cent of GDP as public expenditure. To scale up care, that must be raised to at least 2.5 per cent by the end of the 12th Plan, and 3 per cent in the subsequent five years. This, the expert group estimates, can bring about a dramatic reduction in out-of-pocket spending from 67 per cent of total health expenditures today to 47 per cent by 2017 and 33 per cent by 2022.

An entitlement to free health care, implemented through a carefully chosen package of cashless in-patient and out-patient services, will be a paradigm shift. This is doable, given consistent GDP growth. Moreover, there is adequate room in the tax system to accommodate new demand for a national health plan; after all, India's tax ratio, at a little over 15 per cent of GDP, is much lower than the average of 22 per cent for countries with comparable per capita incomes. The private sector can participate in the provision of universal health coverage as contractual partners, with appropriate regulation and monitoring of costs and quality. The key principle laid down by the expert group for universal access is to not levy any user charge at all. Levying such fees can perpetuate or widen inequalities in poor and middle income settings. The more rewarding approach would be to invest heavily in the public system to provide primary, secondary, and tertiary care, and use private expertise mainly to strengthen that capability. The recommendations of the expert group, including the emphasis on making essential medicines available free to patients through state funding, must be wholeheartedly welcomed.

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