Financing health

The United Progressive Alliance government has lost a valuable opportunity to expand and improve healthcare access across the land and across all social sections during its five-year term. The Common Minimum Programme promised a public expenditure on health of between two and three per cent of the GDP. The actual spending (a statistic inflated by including spending on social determinants such as drinking water and nutrition) was a dismal 1.39 per cent in 2007-08. It may be argued that primary health care has improved in the better-performing States, and the National Rural Health Mission has extended services to far-flung populations. These measures do not, however, address the unaffordable cost of managing chronic ailments arising out of longevity or social circumstances, and of emergency medical care. An expanded, free, healthcare system and improved publicly funded health infrastructure could have benefited millions of people who did not seek care because of high costs, more so during an economic slowdown. Empirical studies show that most Indians incur impoverishing expenditures on health — because they must pay out-of-pocket. The National Commission on Macroeconomics and Health, using new methodologies, estimated in 2005 that households were obliged to use their own resources for 68.8 per cent of the aggregate national spending on health, while the share of the central and State governments together was 21.6 per cent (the rest was accounted for by public sector, private, and charitable sources).

Government investment in health has positive externalities in the form of reduced social costs of morbidity and removal of inequality. Price subsidies or direct public provision of health facilities will encourage more people to seek medical care. The case for massive public investment in health is strong, because this vital area cannot be left to market forces that cater to the better-off sections. Even in the United States, that recognition has led to proposals from Democratic lawmakers for a competition-stirring, government-funded health insurance plan that seeks to achieve the Obama administration’s goal of universal healthcare. It is imperative that India launch a comprehensive plan to reduce out-of-pocket expenditure for all citizens, build first-class primary health care, and widen access to tertiary care through public facilities. A special funding mechanism to create access to and underwrite treatment costs for chronic ailments, such as cardiovascular conditions, diabetes, kidney disease, cancer, and emergencies of all kinds must be the first step. Preventing millions from descending into poverty on account of catastrophic health expenditure must become a national priority. Election season is a good time to reinforce this message.

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