Spending for a healthy India

Updated - December 04, 2021 10:49 pm IST

Published - March 09, 2012 01:31 am IST

An increase in public expenditure on health from an estimated 1.4 per cent of GDP to 2.5 per cent by the end of the Twelfth Plan can, if it is used wisely, bring about a revolution in health care. Prime Minister Manmohan Singh's resolve to boost government spending can potentially make high quality care accessible to all. Universal health coverage, including cashless treatment, is to be achieved through greater expenditure and a system of strong regulatory oversight outlined by the Planning Commission's High Level Expert Group (HLEG). Arguably, with a significant increase in public funding, India can move towards its own model of Britain's famed National Health Service. There is some scepticism about the country's ability to shift to a good tax-funded plan for universal health coverage, but as the HLEG points out, the trajectory of economic growth makes this the opportune moment. Apprehensions raised by special interests against health reform are, naturally, self-serving and should not cloud the vision. What should be borne in mind is that the HLEG has not suggested the scrapping of the private health sector but its participation in the UHC plan on a contracted-in basis, with tight monitoring of costs and protocols.

The need for publicly-funded universal health coverage is beyond argument. At present, private out-of-pocket health expenditure constitutes 3.3 per cent of GDP, or around 67 per cent of the total spending. Moving towards universalisation of care can cut it to about 33 per cent by 2022. Clearly, a policy approach that relies primarily on for-profit health insurance and services cannot provide universal cover, as the experience in the United States has demonstrated. The key to universalisation lies in including everyone in the risk pool, through a system of means-tested compulsion and taxation. Making such a plan work requires extensive reform of standards, protocols and oversight bodies for both public and private sectors. Here, the HLEG has provided a road map that envisages setting up of public health cadres for services and management at the national and state levels, standard setting, and a timeline for merger of existing government-led health insurance schemes such as the Rashtriya Swasthya Bima Yojana and those operating at the State level. An increase in outlay on medicines from 0.1 per cent of GDP to 0.5 per cent for public procurement can ensure free universal access to essential drugs. This measure, suggested for implementation through contracted private chemists, among others, is also vital to cut out-of-pocket expenditure. The States, which are increasingly looking towards private health insurance to fund health care for the poor, should find the HLEG recommendations more sound.

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