Context: Universal Health Coverage (UHC) is essential for ensuring that all individuals in India can access quality healthcare without facing financial hardship. Public spending on health plays a crucial role in achieving this goal.
Relevance of the Topic: Mains: Issues relating to development and management of services relating to Health.
Universal Health Coverage:
- Health is a state of complete physical, mental, and social wellbeing, and not merely the absence of disease or infirmity.
- The concept of Universal Health Coverage covers three key elements — access, quality, and financial protection.
- India is committed to achieving Universal Health care for all by 2030, which is fundamental to achieving the other Sustainable Development Goals.
Extent of Public Spending on Health in India:
- Total Health Expenditure (THE) for India is estimated to be around 3.3% of GDP and ₹4,863 per capita.
- Share of Out-of-Pocket Expenditure (OOPE) in Total Health Expenditure declined from 62.6% in 2014-15 to 47.1% in 2019-20.
- Share of Government Health Expenditure in Total Health Expenditure increases from 29% (2014-15) to 41.4% (2019-20).
- Government Health Expenditure’s share in the country's total GDP increases from 1.13% (2014-15) to 1.35% (2019-20).
Despite the significant increase in government expenditure on Health, it is still way below the target of National Health Policy (2017)- 2.5% of GDP.
Need for Government Health Expenditure:
- Preventive Healthcare: Unlike private Health expenditure, public spending invests heavily on preventive health care services like Immunization and Nutrition which ultimately reduces the expenditure burden on curative Healthcare.
- Reduce Catastrophic Expenditure: In a country like India whose workforce is predominantly concentrated in the informal sector and devoid of social security net, there is more probability for incidence of catastrophic health expenditure on its population. Hence, significant public spending on health is necessary to reduce catastrophic health expenditure and incidence of poverty as a result of it.
- Limitations of Private Participation:
- Affordability: Since private institutions require heavy investment in infrastructure, advanced equipment and quality professionals, health services are not affordable. This causes heavy out-of-pocket expenditure by households, especially in secondary & tertiary care.
- Issues in Private insurance: Adverse selection (asymmetric information between buyer and insurer) and moral hazard (reckless attitude of insured consumers), lead to higher pay-out by insurance companies. This cost is adjusted by increasing premium prices, which makes health insurance less attractive for the majority of Indians.
- Issues with private participation in public-funded health protection schemes:
- Supply-induced demand: When patients are protected under schemes like PMJAY, private hospitals can resort to over-prescription of medication, non-standardised tests, and a longer duration of therapy to generate additional revenue.
- High cost of premium due to 18% GST burden.
- Low-reimbursement tariffs set by the government deter genuine private hospitals to be part of such schemes.
- Overpriced drugs: Private firms have invested heavily in R&D for new drugs, especially for secondary and tertiary care; hence, the price of patented drugs is passed on to consumers.
Conclusion: Private participation can only complement but can not replace public spending on Health to achieve the goal of Universal Health Coverage. To move India towards UHC, the government, civil society, health-care providers, and communities need to work together.