Research conducted in the last few years has shown that every year 3 to 7 percent of Indians go below the poverty line due to out-of-pocket expenditure on health (OOPE). Whereas it has more impact in villages and poor states. Due to OOPE in health, such groups which are deprived of facilities are adversely affected. Recently, there has been a lot of focus on health policy in India. On 25 September 2024, the Government of India (GOI) has released the National Health Accounts (NH) of India for the years 2020-21 and 2021-22.
NHA report
The new NHA report available for 2021-22 shows several changes in health financing parameters over the years. Between 2013-14 and 2021-22 (Figure 1), OOPE in health has seen a sharp decline, from 64.2 per cent in 2013-14 to 39.4 per cent in 2021-22, the year for which the government released the latest data. Was done. Whereas due to the pandemic there was a need to increase health expenditure. It is clear from historical data that this has been a continuous trend throughout the decade. During the same period, government health expenditure (GHE) has increased from 28.6 percent to 48.0 percent. The proportion of GHE surpassing the OOPE component is a watershed moment for India’s health policy, which has been years in the making.
Total Health Expenditure (THE)
The last decade has also been a period when total health expenditure (THE) as a percentage of GDP declined. In other words, increased public expenditure by both the state and central governments is changing the health financing landscape of the country. was the primary driver, leading to a substantial reduction in the burden of health expenditure on Indian households. Also, despite improvements, 39.4 per cent of total expenditure is still spent out of pocket, which is a major policy challenge for the coming years. Looking at the data for 2021-22, India still has a long way to go to reach its target of the National Health Policy (NHP) 2017. Which aims to increase government expenditure on health to 2.5 percent of GDP by 2025.
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OOPE report
About two-thirds of the total GHE is borne by the states and one-third by the central government. The increase in spending by the central government during the pandemic has changed the structure by a small margin. However, after 2022, the utilization of Union Budget allocation in the health sector has not been convincing. There is a large amount of unspent funds left at the end of the year compared to budget estimates.
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Elsewhere it was observed that despite the disruptions affecting real expenditure within the health sector and the need for pandemic-induced emergency funds being reduced, the actual allocation by the central government has not reduced to pre-pandemic levels, which may be affected by future government action. There is an indication of the possibility of further cuts in operated OOPE. The capacity to absorb funds in the public sector is set to improve with the prospects of an ambitious expansion of AB-PMJAY to cover all 70+ citizens and the scheme putting funds back into the public system by government hospitals.
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