Context
India has witnessed a notable shift in its healthcare financing landscape, as highlighted in the National Health Accounts (NHA) report for 2021-22. This report reveals a significant decline in out-of-pocket expenditure (OOPE) and a corresponding rise in government health spending. These changes mark important progress towards achieving Universal Health Coverage (UHC) and improving the overall health system in the country.
Decline in Out-of-Pocket Expenditure
Overview of OOPE Trends
The out of pocket expenses mean the actual costs incurred by individual Households towards the cost of care at the individual Consumer level. Speaking of the NHA report, OOPE has reduced from 48.8 percent of THE in the year 2017-18 to 39.4 percent in the year 2021-22. This decline reveals a positive sign of the general improvement with regard to the cost incurred by the households when seeking for health services.
Factors Contributing to the Decline
Several factors have contributed to this reduction in OOPE:
- Increased Government Spending: Spending by government on health has increased from 40.8%THE to 48% over the same period. This increase proved the government emphasis on the improvement of public funds for health care.
- Growth of Private Health Insurance: Number of private health insurance covered has also increased from 17.97 million in 2017-18 to 35.83 million in 2021-22. This growth is in line to mean that the insurance coverage of the population is increasing hence reducing the cost that the populace incurs.
- Government Schemes: Some of the past governments introduced programs and schemes like Ayushman Bharat through primary and secondary care, financial risk protection, and outreach, have contributed effectively in reducing the OOPE by providing insurance coverage to those economically vulnerable health care seekers.
Rise in Government Health Expenditure
- Government Spending Trends: The NHA report shows that whereas health expenditure by government out of the GDP in the period 2017-18 was only 1.35% it has increased to 1.84% in the period 2021-22. This increase is in accordance with the government’s vision of increasing health expenditure to 2.5 percent of the GDP by 2025. Increased spending is necessary in order to build a better health system for the public and to enhance the delivery system.
- Per Capita Health Expenditure: Out of pocket expenditure per capita has risen from ₹ 1753 to ₹ 3169 between 2017-18 to 2021-22. This good rate means an increased investment per capita and can be seen as the government trying to push up the standards of health care in the different states.
Challenges Ahead
Despite these positive trends, challenges remain:
- Social Security Expenditure: Health sector social security expenditure reduced from 9% in 2017-18 to 8.7% in 2021-22, implying the need for a focused effort on strengthening financial systems to provide social protection to the population.
- Target Achievement: Government is keen to make sure that OOPE declines even more and thus the best projections to FY26 stand at 35%. The achievement of this vision will therefore call for more focus and planning.
Conclusion
In India, the prospect of healthcare financing seems very encouraging as reflected in the NHA report for 2021-22. The out of pocket health consumption spending has come down at the same time that both government expenditures have gone up, indicating an inclination towards equitable accessibility of health care facilities in the country. While India continues to work towards the realization of UHC, sustained and focused efforts will be required to sustain, and indeed, overcome existing difficulties within the framework of healthcare. The progress made so far creates a good background for further enhancements and underlines the need for further government investment and continuous changes in the policies as the main factors that can help reach the ultimate goal of successful medical needs coverage for all the citizens.
Source: Indian Today