It is well understood that health influences aggregate economic outcomes. For long now, the governments at the Centre and states have been making concerted efforts to improve the country’s health status across rural and urban areas. However, the health parameters of Indians remain low.
The total expenditure on health as a percentage of GDP in China and India is similar – around four per cent in 2009 – yet health indicators are quite different. In China, the under-five mortality rate per 1,000 live births is 19, while the corresponding proportion in India is 66. India’s maternal mortality ratio per 100,000 live births is 230, China’s is only 38. The striking disparity is the fallout of various lacunae in the Indian health system, low expenditure, misallocation of resources, inefficiencies in delivery channels and so on.
To begin with, in China, the total expenditure on health per capita is $169, while in India it is merely $45. More significantly, in China half of the total expenditure on health is borne by the government, while in India, the burden falls on the private sector that accounts for more than two-thirds of the total health expenditure. The implications of this for poorer households that often have to borrow to cover medical costs is staggering. (Click here for graph)
| COST OF WELLNESS Total expenditure on health | ||||
| India | China | |||
| 2000 | 2009 | 2000 | 2009 | |
| As % of GDP | 4.6 | 4.2 | 4.6 | 4.6 |
| Per capita in US$ | 21 | 45 | 44 | 169 |
| PRIVATE REMEDY India’s health system depends on the private sector | ||
| India | China | |
| General government expenditure on health as % of total health expenditure | 32.8 | 50.3 |
| Private expenditure on health as % of total health expenditure | 67.2 | 49.7 |
| Source: WHO, Global Health Expenditure Database 2009 | ||
The National Sample Survey data of 1995-96 and 2004 show that out-of-pocket spending per hospital stay and per outpatient visit increased rapidly for all income groups, but much more for the least well off, relative to their income growth. In fact, a much greater proportion of the poorest 20 per cent households report foregoing treatment on account of inability to pay than the richer groups and this trend, too, has been increasing over time.
State government expenditure on medical and public health varies widely across states. Since budget or revised estimates differ significantly from the actual expenses, the latest data for actual spends are from 2008-09 for all states. Smaller states of Mizoram, Arunachal Pradesh, Sikkim, Goa and Puducherry top with more than Rs 1,000 spent on health per capita. The gross inequality across states is evident from the fact that Mizoram’s per capita expenditure is at least 13 times higher than that of Bihar, the lowest in the country. Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttaranchal and Uttar Pradesh, which were declared the Empowered Action Group States in 2003, are among the states with low per capita health expenditure. Among these eight states, it is only in Uttarakhand that the per capita health expenditure exceeds Rs 500. In Jharkhand and Rajasthan, it is little above Rs 300, while in others it merely in the range of Rs 135 to Rs 238.
Though government spending on health and family welfare in per capita terms is absurdly low in India, private health expenses are rising with little government oversight on quality, consumer redressal and so on. Of course, outcomes are much more important than outlays; it is, therefore, also important to focus on an overhaul of the implementation systems, coordination between various government entities and programmes and monitoring the numerous current schemes.
Indian States Development Scorecard is a weekly feature by Indicus Analytics that focuses on the progress in India and the states across various socio-economic parameters
sumita@indicus.net