Out-of-pocket expenditure in health sector sees 16% decline in 2020: Report

A consistent decline in the share of out-of-pocket expenditure in total health expenditure has been recorded from 62.6 per cent in 2014-15 to 47.1 per cent in 2019-20, according to the National Health Accounts Estimates 2019-20 released on Tuesday.

During the same period, the government health expenditure (GHE) as a share of the total health expenditure (THE) increased from 29 per cent to 41.4 per cent, the data stated.

Overall, the government health expenditure as per cent of GDP has increased over the years from 1.13 per cent in 2014-15 to 1.35 per cent in 2019-20. For the same period, GHE as per cent of general government expenditure (GGE) has increased from 3.94 per cent to 5.02 per cent.

In per capita terms, GHE has doubled from Rs 1,108 to Rs 2,014 between 2014-15 to 2019-20. The government spending on health between 2018-19 and 2019-20 increased by 12 per cent, more than double the growth rate between 2017-18 and 2018-19 which was at 5 per cent, said Dr V K Paul, Member (Health), NITI Aayog as he launched the National Health Accounts (NHA) Estimates for India for 2019-20.

Additionally, in the General Government Expenditure, the share of health sector spending has steadily increased from 3.94 per cent to 5.02 per cent between 2014-15 and 2019-20.

This clearly indicates that healthcare has been the priority for public investment in the country.

"Through the National Health Accounts Estimates report, we can see that indicators like out-of-pocket expenditure (OOPE) reduction are going hand in hand with increased public spending in healthcare. Thus, showcasing the right trajectory the country is taking towards achieving milestones of Universal Health Coverage," said Dr Vinod K Paul, Member (Health) of NITI Aayog after he launched the National Health Accounts (NHA) Estimates for India for 2019-20.

"The share of out-of-pocket expenditure in total health expenditure declined from 62.6 per cent to 47.1 per cent. The continuous decline in OOPE in the overall health spending shows the progress towards ensuring financial protection and universal health coverage for citizens," he said.

The increase in government spending on health has an important implication for the reduction of financial hardship endured by households.

"In the total health expenditure of the country between 2014-15 and 2019-20, the share of GHE has increased from 29 per cent to 41.4 per cent," he said.

The share of primary healthcare in Current Government Health Expenditure (CGHE) has increased from 51.3 per cent in 2014-15 to 55.9 per cent in 2019-20. The increased focus on primary healthcare reinforces the government's decisions to prioritise primary healthcare in the country, Dr Paul said.

Another positive trend in the country's health financing space is the increase in Social Security Expenditure (SSE) on healthcare, he highlighted.

"This increase in social security has a direct impact on reducing out-of-pocket payments. A robust social security mechanism ensures that individuals will not face financial hardship and the risk of poverty as a consequence of accessing essential healthcare services," Paul said.

The share of SSE on health, which includes government-funded health insurance, medical reimbursement to government employees, and social health insurance programs, in THE, has increased from 5.7 per cent in 2014-15 to 9.3 per cent in 2019-20, he said.

Paul also highlighted the persistent efforts in increasing total public spending on health at state level. He thus, urged state governments to move ahead in healthcare spending as percentage of their total budget to about 8 per cent which is currently 4-5 per cent for many states.

He further added that this spending must be in line with the bigger picture of benefiting the citizens.

While congratulating everyone on NHA Estimates report launch, Paul stated that

"the government is ensuring that healthcare services that are required, be made readily available and accessible to citizens without financial hardships.

Highlighting investments in strengthening primary healthcare, Paul said the report "highlights the increased public spending in primary healthcare, which is in line with the National Health policy 2017 where it states that two-third of public health spending must be in primary health systems.

"This is also a result of great developments/initiatives taken at grassroot level such as opening of over 1.6 lakh Ayushman Bharat Health and Wellness Centres (AB-HWCs) which are providing plethora of health services to the people," he said.

He further said primary healthcare must be prioritised as it is the fundamental base on which secondary and tertiary services can be supported efficiently.

He said these estimates are crucial for policymaking and comparing various indicators further aids in reflecting the progress made by the health system of the country.

Paul also threw light on the fact that private health insurance share is also going up. He said this shows a "sign of maturity for a country in terms of insurance arena as those who can afford, will afford it from private players too. This complements the government system of primary, secondary and tertiary care.

The NHA Estimates for 2019-20, which is seventh in the series of reports released annually, clearly show that government expenditure for healthcare continues to be the priority, he added.