Health spend @ 2.5% of GDP : A TALL ORDER?

Why is the healthcare sector in India being overlooked by budget after budget?

Health spend @ 2.5% of GDP : A TALL ORDER?

The Union Budget 2019-20 came up with several novelties. For the first time, perhaps after several years, the finance minister appeared before the parliament bereft of the customary `budget briefcase’  — the hallmark of the budget ritually carried by Indian FMs on the big day. Instead, Nirmala Sitaraman carried the budget papers in a red cloth bag, neatly wrapped and embossed with the national emblem. Her budget speech too departed, at times, from conventional practices. Upon reaching the section on health care budget allocations in her speech, the minister made a passing reference and went on to the next item, much to the chagrin of the stakeholders waiting with bated breath.

The FM didn’t elaborate on the health budget, nor did she make any major policy announcements.

The industry groups, who were lobbying hard to get some policy sops announced in the budget, were disappointed.

Reading the fine print, however, reveals that Rs 62,659.12 crore has been allocated for the healthcare sector in the Union Budget for the financial year 2019-20. The number is around 18% higher than that of the previous year’s budget. Also, there is a separate allocation of Rs 6,400 crore for Pradhan Mantri Jan Arogya Yojana (PMJAY) or Ayushman Bharat Scheme, the prime minister’s flagship programme aiming to provide insurance cover of up to Rs 5 lakh per family per year for secondary and tertiary hospitalisation. The highly ambitious programme, launched in October 2018, is expected to benefit over 50 crore poor people.

Way behind

With an 8% hike, the National Health Mission forms one of the beneficiaries of the 2019-20 budget. NHM, which covers most of the centre-sponsored schemes related to healthcare, now has a kitty of Rs 32,995 crore.

The 2019-20 budget allocation has helped increase public funding on health care to 1.29% of India’s Gross Domestic Product (GDP) from 1.2%, where it had remained for the last 15 years.

Nevertheless, considering India’s goal of raising the spending to 2.5% of its GDP by 2025, this is also way below the target.

The budget funds provide for nearly 20% of the overall health expenditure in the country, with 80% being provided by the private sector.

At this level of public spending, it would be extremely difficult to achieve not only long-term goals, but even immediate targets such as reducing infant mortality and maternal mortality to the desired levels by 2020.

Forget the Western world, even among the BRICS countries, India’s per capita spending on healthcare remains dismal.

It is not even comparable to many countries belonging to the South-East Asian block. A recent WHO report indicated India’s spend ratio is even below that of the Maldives’.

“The 15.4 percent higher allocation (in the budget) is a myth and provides for only inflation. There is absolutely no indication of any vision towards raising the public health expenditure to 2.5 percent of GDP,” IMA president Santanu Sen said in a statement.

Health infra: Woefully poor

With its burgeoning population and poor healthcare spending, India is heading for a major healthcare crisis in the coming years, experts warn. By 2020, the average Indian will be 29 years of age. While a youthful India can fuel the economy, the great Indian middle class is on the verge of a healthcare crisis.

Even though public health services are available to all citizens, bottlenecks in accessing the services compel people to seek private care. This results in high out-of-pocket payments. At 69% of the total expenditure, out-of-pocket spending in India remains one of the highest in the world. Health expenses from personal savings come only 13.4 percent in the US, 10 percent in the UK and 54 percent in China.

Perpetually bogged down by inadequacies in infrastructure, manpower, machinery and medicines, India’s healthcare setup has proved ineffective in handling the country’s phenomenally increasing population.

The average number of hospital beds available for patients in India is still one-third of the global average.

As of 31st March 2017, about 156,231 sub-centres, 25,650 primary health centres and 5,624 community health centres were catering to the 700 million rural population in India — which comes to around 60% of the country’s 1.32 billion people.

The gaps in manpower are disturbingly huge. Presently, the country faces a shortfall of around 82% in specialists like surgeons, gynaecologists, physicians, and paediatricians. India is falling short of laboratory technicians by about 40%, and there is a 12%–16% shortage of nurses and pharmacists at community and primary health centres, as per official statistics.

Machines and medicines are grossly inadequate at many public hospitals.

As far as the quality of generic medicines is concerned, there is no efficient mechanism to ensure the same. Nor are there any functional systems to monitor the quality of care.

Maladies galore; agencies defunct

India is home to the highest number of patients with infectious diseases like tuberculosis. Non-communicable and lifestyle diseases too are escalating to alarming levels. The risk of child and maternal malnutrition is still unacceptably high. The disease burden due to unsafe water and poor sanitation continues unchanged in many regions of the country. Despite these facts, healthcare is yet to be made a priority by policymakers.

India spends 5 times more on defence than health. In comparison with Rs 62,659 crore for healthcare in FY2019-20, the estimated budget expenditure for defence is
Rs 305,296 crore. The trend in resource allocation for both sectors have remained the same in the budgets of the past two years.

Healthcare is primarily the responsibility of the states in India. Besides the Union Ministry of Health and Family Welfare (MOHFW), public actors in the Indian healthcare system include state governments municipal and local bodies. Each state has its own Directorate of Health Services (DHS) and the Department of Health and Family Welfare. District-level health services provide a link between state and primary care services.

Multiple agencies under different ministries are involved in regulating health care. Hence, there is a lack of clarity in India with respect to which entities are responsible for regulating the private sector and for ensuring quality of care.

Lacking in outreach

Despite repeated assurances from various governments, including the present one, to address infrastructural issues, access to medical facilities and inexpensive treatments, the condition continues to be abysmally poor in many parts of the country.

“Children are dying because of a lack of medicines and treatment,” stated Rabri Devi, former chief minister of Bihar, commenting on the death of over 165 children following an outbreak of acute encephalitic syndrome in Muzzafarpur district in the state recently. To reach a health facility that provides care for AES, parents had to carry their sick children hundreds of miles from the hinterlands of one of India’s most impoverished states where transportation facilities are poorly developed.

According to Rural Health Statistics Bulletin 2017-18, the country has a shortage of 32,900 sub-centres and 6,430 primary and 2,188 community health centres as on March 31, 2018. Each sub-centre caters to 5,000 people, while PHCs and CHCs address the health care needs of 30,000 and 80,000-120,000 people in rural areas respectively.

Among existing centres, only 7% of sub-centres, 12% of PHCs and 13% of CHCs are functional, as per Indian Public Health Standards.

The situation is even worse in tribal areas, indicate RHS figures.

The Union Budget 2019-20 has no direct reference on addressing the vexing issue of healthcare infrastructure. However, the FM said in her budget speech that the government plans to invest Rs 100 lakh crore in infrastructure over the next five years. Hopefully, some of the outlay could go into the vital healthcare sector, as well.

Health for all — An unfinished agenda

During the Muzzafarpur AES outbreak, the National Human Rights Commission sent notices to the state and central governments, seeking an explanation for the rising death toll among children, after taking suo motu cognizance of media reports. The Supreme Court of India too sought an affidavit from the central and Bihar governments on the adequacy of health services, nutrition and hygiene, emphasizing that these were basic rights, while hearing a public interest litigation.

Healthcare is a human right, as highlighted by the UN-sponsored Alma Ata Declaration accepted by 134 countries in 1978. It is after 40 years of the declaration that India has started thinking about “health for all”.

Universal Health Care (UHC) is at the core of PMJAY, launched in October last year. It is still a long way for India to make UHC a reality. A myriad of issues related to healthcare needs to be sorted out before the country can start counting itself among the list of nations with the best healthcare plans, experts point out.

In order to achieve comprehensive and universal health, the public healthcare system needs to be reinforced from the primary to the tertiary levels with adequate infrastructure, human resources, medicines and other facilities. There is no country or plan out there for India to emulate. Any attempt to replicate the healthcare plans of other countries could even prove counterproductive, considering India’s entirely different demographics.

Again, what is going to be crucial here is enhanced public spending. For such a level of funding for the health sector, there needs to be a strong political will and a high level of commitment to invest in health. The road to this is only through a consensus among various political streams sharing the same passion — a practically difficult task, considering Indian realities

Apart from coordinated action from various ministries, participation of various non-governmental and private organizations is critical to achieve the targets.

Catastrophic health expense

In any country, the healthcare system is build up on public and private systems. Going by the available figures, less than 42% of India’s urban and 46% of the rural population opt for public healthcare services at present.

Clearly, the private sector is the dominant player in the healthcare arena in India. As mentioned, three-fourths of the healthcare expenditure comes from the pockets of households. Such an expense can be catastrophic and is an important cause of impoverishment. The quality and cost of service varies in the private sector as there is no regulatory oversight.

The number of deaths due to lack of medical treatment and facilities is pretty high in India. The rate of such deaths in India per 1,000 people was 7.3 as of 2015. But the numbers continue to increase every year because of the inadequacy of quality medical care and increasing cost of treatment.

In order to address this crisis, basic healthcare needs such as medical care, suitable medical professionals aid and the availability of quality hospitals and healthcare systems are warranted. This becomes the criterion which prompts people to choose between public and private healthcare services in India.

Nobody is turned away, even if he is penniless, from a public hospital. Since the public healthcare system is funded by the government, it has to cater to everyone. As a result, citizens are forced to stand in long queues to get treatment. This makes many of them end up going to private hospitals for timely treatment, which often pushes them below the poverty line due to exorbitant out-of-pocket expenses.

“The atmosphere of violence in our hospitals is directly due to the inadequacy of infrastructure and human resources in the public sector and out-of-pocket expenditure in the private sector,” says a statement by IMA, referring to the rising incidence of attacks against doctors in the country.

At the same time, the track record of public-private partnerships in delivering healthcare services are also not very encouraging. The private healthcare sector has been requesting the government to explore opportunities for collaboration and for working towards strengthening public healthcare infrastructure, as well as to iron out gaps in the implementation of Ayushman Bharat initiative announced last year, said Kiran Mazumdar-Shaw, CMD of India’s largest biotherapeutics firm, Biocon. Sadly, little progress has been made, she lamented in a recent statement.

Generic drugs: Quality questioned

The affordability of medicines is key to the success of any healthcare system because medicines are often the costliest components in healthcare.

Known as the `pharmacy of the world’, India produces plenty of cheap versions of branded drugs, called generics. As a part of the policy of providing affordable drugs to all, the government has started thousands of outlets selling generic drugs under the Bharatiya Jan Aushadhi banner. Already, generic drug stores have been opened in 612 of the 717 districts in India under the Pradhan Mantri Bharatiya Jan Aushadhi Pariyojna (PM BJP) scheme. Jan Aushadhi stores will reach all districts in India by mid-August, according to the Bureau of Pharma Public Sector Undertakings of India (BPPI), the agency which runs the programme.

These stores will sell more than 900 medicines and 150 surgical items at discounted prices, sometimes as cheap as 20-30% of the market rate.

As per the BPPI’s plans, low-cost generics would be available all across the country before the end of the year.

The question, however, is not just about availability, but also whether doctors will prescribe generics in place of branded medicines.

The Medical Council of India, the apex body that regulates the standards of medical education in the country, has already issued a directive to prescribe medicines only by their generic names. The practice is yet to be fully implemented in the country.

Most medical practitioners are hesitant to prescribe by generic names for various reasons. They argue that the quality of these drugs “needs to be authenticated, regulated, and ensured” before they can be widely adopted.

With a large number of generic products available for each pharmaceutical product, it will be up to the chemist to decide which generic should be given to the patients.

Moreover, considering the lax manufacturing practices and loose regulatory oversight, it wouldn’t be prudent to write only the generic names, they argue. The prescribing clinician may have to bear the brunt if the drugs fail, they add.

Far from priority

Health is considered one of the cornerstones of economic development. A healthy population means higher productivity. It serves as a catalyst for economic growth.

All countries desire to develop strong healthcare financing systems. The increasing cost of healthcare, accompanied by the poor economic performance of developing countries, however, makes it difficult to meet this objective.

Several studies indicate a positive correlation between expenditure on health and economic growth. People who live in countries that spend more than 15% of their government expenditure on health tend to live longer than those living in countries that spend less, according to a recent African study. So, experts argue that higher expenditure on health may reduce cases of untimely deaths due to lack of appropriate medical care.

Moreover, higher public outlays and a proper reorganization of the health system with greater emphasis on primary medical centres could, to some extent, stem the huge loss of output due to the incapacity of the aged who are increasingly vulnerable to non-communicable diseases like diabetes, cardiovascular diseases, cancer.

Health spending is not a cost, it is an investment in poverty reduction, jobs, productivity, inclusive economic growth and healthier, safer and fairer societies, says Dr Tedros Adhanom Ghebreyesus, WHO Director-General. “Increased domestic spending is essential for achieving universal health coverage and the health-related Sustainable Development Goals,” he underscores.

A recent WHO study showed that government health expenditure per capita has doubled since the year 2000 in middle-income countries. On average, governments spend US$60 per person on health in lower-middle-income countries and close to US$270 per person in upper-middle-income countries.

When government spending on health increases, people are less likely to fall into poverty when availing health services. Government spending can also help in reducing inequities in access to health care. However, it needs to be ensured that the entire population can obtain primary health care.

“Health is a human right and all countries need to prioritize efficient and cost-effective primary health care as the path to achieving universal health coverage and the Sustainable Development Goals,” says Dr Agnes Soucat, WHO Director for Health Systems, Governance and Financing.

For now, however, India seems to be quite far off from achieving that goal.

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