Need for higher spending on healthcare

New Delhi: The Union Finance Ministry on Friday pressed on the need for higher public spending on healthcare, its accessibility and affordability.

As health is a State subject in India, spending on healthcare by the States matters the most when examining government healthcare spendings, according to the Economic Survey 2020-21, which was presented in the Parliament on Friday by Finance Minister Nirmala Sitharaman.

According to the National Health Accounts, 2017, 66 per cent of spending on healthcare is done by the States.

In terms of healthcare Budget, India ranks 179 out of 189 countries in prioritisation accorded to health in its government Budgets. This is similar to donor-dependent countries such as Haiti and Sudan.

"The States that have higher per capita spending have lower out-of-pocket (OOP) expenditure, which also holds true at the global level. Hence, there is a need for higher public spending on healthcare to reduce OOP expenditure," the survey stated.

The survey also suggested that an increase in public spending from 1 per cent to 2.5 to 3 per cent of GDP can decrease OOP expenditures from 65 per cent to 30 per cent of overall healthcare spend.

From a financial perspective, India has one of the highest levels of OOP expenditure in the world, contributing directly to the high incidence of catastrophic expenditures and poverty.

"In fact, at small levels of public spending -- less than 3 per cent of GDP -- even marginal increases in public spending generate substantial bang for the buck in reducing OOP expenditure," the survey said.