‘We wasted two months in March and April because we did not have coronavirus testing kits and laboratories’, says former Union health secretary.
India has been chronically underspending on health, and Covid-19 has put in stark focus the damage that can do, K Sujatha Rao, former Union health secretary says. “We need to have a constant vigil and it is very important to keep investing in basic healthcare, surveillance systems, and public health functions.”
Rao describes this as a “tragic moment” when, even as we ought to increase spending on health, the economy is badly affected, adding that the government has to re-prioritise and look for more reliable and less costly options to tackle the crisis – including community participation and co-opting small and medium nursing homes and clinics at a fair rate.
In this interview, we discuss what public health finance means and how it can be administered more effectively, including the lessons that we have learnt from Covid-19.
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Excerpts from the interview:
We all access some form of healthcare, either in the private or public space. Where does public health finance come in? And when people say that India spends a very low percentage of its gross domestic product on health – less than 2% – what do they mean?
All expenditures incurred on health – direct and indirect, which are spent by households, by the private sector setting up a hospital, or by the government which implements programmes where they give drugs or set up hospitals like AIIMS [All India Institute Of Medical Sciences] – constitute the total health expenditure.
It is normally believed that for the country to get at least a reasonable quality of healthcare, it should be spending at least 5% of its GDP, a majority of which should be public health financing – which means the government pays out of the taxes it collects, from its revenue. The only outlier here, of course, is the United States. But even in the US, 50% of the total health expenditure is incurred by the government through its various programmes. So it is not all private sector.
Here, when we say that we need to spend more, India has been chronically – right from the beginning – spending about 0.9% to 1.2% of the GDP. It has never gone beyond that. Sometimes, expenditures incurred on water and sanitation are also included because they do have health outcomes, and so they raise it up to saying we are spending 1.4%.
But in reality, if you just were to take the total health spending incurred by the Government of India –ministries of health, railways, defence, labour, etc, all these departments spend on health for their own target groups – and complemented by the state governments, last year we spent 1.15% of our GDP. We are one of only 15 countries in the world that have spent less than 1.2% of the GDP [on health]. It is extremely low and that is the reason why most spending is through out-of-pocket expenditures. That means people are paying for their healthcare, and so they say that health security in India is extremely low.
When we say, for instance, that the private sector represents almost 70% of India’s healthcare sector, does that mean in terms of expenditure as well?
No. Private sector also means private sector healthcare givers – the hospitals and those who are providing service. It also means households. [If] I go to a quack and buy some drugs from him, or [if] I go to a solo practitioner or a pharmacy shop, buy drugs, or go to a diagnostic centre and get an X-ray done – all that comes under the private sector spending.
So if you say private sector expenditure is 69% of the total health expenditure, that is right in the sense [that] it is households who are spending the money because more than half of this is going just on diagnostics and medicines. So it is believed that if the government were to intervene just on those two, the out-of-pocket expenditures or private expenditures would reduce.
Source: Scroll
