Govt’s FY19 health spending dropped from previous year

The Union government’s healthcare spend dropped to 1.28 per cent of the Gross Domestic Product (GDP) in 2018-19 from the previous year’s figure of 1.35 per cent.
In fact, total health expenditure — the total money spent on healthcare the government, people, private entities and external funding — has fallen from 3.9% of the GDP to 3.2% in five years ending in 2018-19, according to the National Health Accounts Estimates 2018-19 released Monday.

The decline in proportion to GDP has happened despite an increase in the government’s share of the country’s total health expenditure — from 29 per cent in 2014-15 to 40.6 per cent in 2018-19.
“Even though the GDP or the size of the country’s economy must have increased in the five years, we would expect the spending on healthcare to either go up or at the very least remain constant. This, however, has not happened. And, the chronic under-funding of the healthcare sector affects the poorest. Bad infrastructure in public facilities, long queues at hospitals such as AIIMS, or issues with accessing the facility leads to even the poorest spending out of pocket and going even to unlicensed practitioners,” said an expert on health financing, requesting anonymity.
Government spending on health schemes contributed 9.6 per cent of the total health expenditure, as against 9 per cent the previous year. Ayushman Bharat was rolled out in the September of the same year to which the report pertains. Hence, this proportion is likely to increase in the subsequent reports.

Other than government spending and people spending out-of-pocket, private health insurance accounted for 6.6 per cent of the total health expenditure, against 5.8 per cent the previous year.
The expert quoted above said: “We need to look at whether the number of people covered has increased or just the amount they are paying as premiums. There have been huge increases in the premiums over the last few years. People paying for healthcare expenses out-of-pocket made up 48.2 per cent of the total health expenses in the year 2018-19, a small drop from 48.8 per cent the previous year. Out-of-pocket expenses have now decreased substantially from the seen 62.6 per cent during 2014-15.
What worries experts is a 10-percentage point drop that was recorded in the 2017-18 report. “There is no on-ground explanation for the drastic drop in out of pocket expenditure, so we need to look at the methodology. This drop has been worrying many,” the expert said.