New Delhi: Real per capita health spending in India was the highest in 2019-20 since 2004-05, the earliest year for which this data is available, according to Union health ministry’s National Health Accounts (NHA) estimates published on Tuesday, with the government’s share increasing sharply.
NHA provides systemic description of the financial flows in India’s health system.
While over half of this growth came from the government spending more on health, households’ out-of-pocket (OOP) health spending was also at a three year high in the fiscal year just before the pandemic. The government and household contribution to health spending was 41.4% and 47.1% respectively in 2019-20, the highest and lowest by the two in the NHA series.
“One of the significant parts is that the percentage of health expenditure incurred by government has increased significantly. In per capita terms, in 2014-15, the government used to spend almost ₹1100 per capita and in 2019-20, it has increased to ₹2014, which is almost double. In terms of percentages, it was 1.13% of GDP earlier and has become 1.35% of GDP in 2019-20,” said Union health secretary, Rajesh Bhushan.
Read: India’s total health expediture dips, some markers up in 2018-19
{{/usCountry}}Read: India’s total health expediture dips, some markers up in 2018-19
{{/usCountry}}India’s total health bill was ₹655800 crore in 2019-20, according to NHA estimates. This is 9.96% more than in 2018-19, the fastest year-on-year growth since 2013-14. While NHA estimates are also available for 2004-05, they are available consistently only since 2013-14.
To be sure, the trends in total health bill taken in current prices can be misleading. This is because a country’s total health bill can also increase just because of an increase in population. Per capita spending in constant prices adjusts for population as well as inflation. This shows that India’s per capita health spending was ₹3,516 in 2019-20 at 2011-12 prices. This is ₹202 or 6.1% more than in 2018-19 and the highest India has spent on health in any year for which NHA estimates are available. Before 2019-20, India has spent the most in 2016-17: ₹3,503.
More than half of the ₹202 growth in health spending in 2019-20, however, was because of the government spending more on health. Union government’s per capita health spending increased by ₹59 to ₹521 and state governments’ combined per capita health spending increased by ₹50 to ₹935. The Union government’s expenditure was the second to that in 2017-18 (when it was ₹555) and state governments’ expenditure was the highest in the NHA series.
Read: Explaining the declining household burden of health spending in India in 2018-19
OOP spending of households, on the other hand, increased by ₹58 to ₹1,656 per capita. This is the third lowest value in the NHA series since 2013-14, but the highest in the three years since 2017-18. The trend since 2017-18 is important because per capita OOP spending decreased dramatically in that year. This was likely the result of availability of new survey data. From 2017-18 onwards, NHA made OOP spending estimates using the National Statistical Office’s (NSO) 2017-18 health consumption survey, as HT reported last year
NHA estimates up to 2016-17 relied on data from the 2014 NSO survey for OOP spending. To be sure, there is a small change in methodology in estimating OOP spending this year too. The OOP spending on sterilization has been estimated using data from the National Family Health Survey (NFHS) conducted in 2019-21.
While real per capita OOP spending in 2019-20 was the highest since 2017-18, its contribution to India’s total health spending has decreased from 48.2% in 2018-19 to 47.1% in 2019-20, the lowest in the NHA series. Total government contribution to health spending, on the other hand, has increased to its highest level: 41.4%.
As HT reported last year, despite the repeated changes in the methodology of NHA estimates, the government’s contribution in decreasing health spending in recent years is also suggested by other health data, such as the 2017-18 NSO survey. Although to a lesser degree, the 2017-18 NSO survey also showed a decrease in OOP spending.
“The nation is moving towards increased public health spending, both centrally and at state levels. In effect, the country is also moving towards effective implementation of universal health coverage without causing financial hardship to its people,” said VK Paul, member (health), Niti Aayog.
“The government’s investment in strengthening primary health care, where people are being provided free drugs and diagnostics and screening has a lot to contribute in reducing out of pocket expenditure in health care. The report shows that the government is making best efforts in the direction of achieving the target of increasing public health spend to 2.5% of the GDP by 2025,” added Paul.