DNA exclusive | Union Budget 2018-19: 62% spend on healthcare from own pockets; 27% sell off assets

With a view that the health budget should expand for the 2018-19 financial year, the Union Health Ministry earlier this month made a presentation to the Ministry of Finance in an effort to apprise the latter for the need to invest in health.

By the Centre’s own admission, the health ministry stated that close to eight crore people slip to the below poverty line level due to the amount spent on health every year. DNA has a copy of the presentation.

As per information available, 62% of India spends on healthcare from their own pockets, and 27% of the patients hospitalised had to sell their assets or borrow money to pay for healthcare.

The health ministry has intimated to the finance ministry that except for India all other major economies in the world have higher government health expenditure (GHE) than out of pocket expenditure (OOPE) for a patient. In India, 30% of expenditure is GHE, while 62.4% is OOPE. However, in France, the GHE is 78.2%, while OOPE is 6.3%  

India spends not more than a lowly 4.3% of the total government expenditure on health, says the presentation. In comparison, Thailand and UK allocate a double-digit of 16.9% and 16.2% of the total government expenditure on health.

Various research reports, as highlighted over the past few years, have made similar estimates. In December 2016, DNA had reported that 8.5 crore Indians slip below poverty line due to catastrophic health expenditures as revealed in the Brookings India report. Subsequently, a report released by the World Health Organization in December last year, estimated that five crore Indians become impoverished as a result of having to divert money from spending on food, clothing and shelter towards health treatment.

If the presentation is anything to go by, the Union Health Ministry’s estimates override the WHO report.

Substantiating the need to invest in health the 2017-18 Economic Survey report, released earlier this week says, “In a developing country like India, incurring higher levels of Out of Pocket Expenditure (OOPE) on health adversely impacts the poorer sections and widens inequalities.”

It further acknowledges, “Limited affordability and access to quality medical services are among the major challenges contributing to delayed or inappropriate responses to disease control and patient management.”

The report points out that cost of diagnostic services in India are unregulated to a massive extent. A 2D Echo test in a private centre may cost as much as Rs 5200, almost 10 times more than the minimum price of Rs 500 in other centres.

In 2016-17, India allocated Rs 38,343 crore to health and this was increased by 24% in 2017-18 to Rs Rs 47,353 crore, but these still results in barely 1.4% of total Gross Domestic Product (GDP) of India. The National Health Policy envisages raising public health expenditure to 2.5% of the GDP by2025. But experts say that this is too late a target and that India should focus on spending more on health immediately to avert the ongoing crisis.