How much does India spend on healthcare?

Read this to understand India's spending on healthcare sector, its major roadblocks and the way ahead.

How much does India spend on healthcare?

The public healthcare system in India is ailing. It’s a tale of two different groups. The first represents the rich and upper-middle-class segment that has ready access to healthcare, generally from private players. This is easily accessible and of supreme quality but can be expensive. 

The other group represents the lower-middle-class and poor who receive healthcare from the public sector. This is difficult to access and of substandard or even poor quality. The amount of money spent on it is not just insubstantial; it's absurdly low. 

India versus the world

With 55 million people living BPL (below poverty line) with no assistance from the government, the poor find themselves with very little to choose from when it comes to healthcare. While public healthcare might be the best they can afford, the substandard public hospitals are dreadful and private facilities much too expensive. 
The country’s per capita public expenditure with respect to health was Rs 621 in 2009-10, which increased to Rs 1112 in 2015-16. However, this seems absurd when compared to the US or the UK, with a per capita public expenditure of $4802 and $3500 respectively. 

India spends just 1.2 per cent of its GDP on its healthcare. China, on the other hand, spends almost 5.6 times more and the US around 125 times more. In India, the health expenses from an individual’s personal savings are 62 per cent, compared with 10 per cent in the UK and 13.4 per cent in the US.

The major roadblocks facing the country’s healthcare industry include the following:

    •    Negligence of rural population: Though there are numerous PHCs (primary health centres) and rural hospitals, an urban bias is evident. Statistics show only 31.5 per cent of hospitals and a mere 16 per cent of hospital beds are situated in rural areas, where three-fourths of the total population resides!
    •    Lack of proper infrastructure: The current healthcare infrastructure isn’t robust enough to support the needs of a fast-growing population, though both Central and State governments provide free treatment and essential drugs at government hospitals and PHCs. The hospitals are underfinanced and understaffed, forcing patients to turn to expensive private players.
    •    Shortage of healthcare professionals: As mentioned previously, healthcare in the public sector is struggling with underequipped and understaffed hospitals. In the absence of doctors and healthcare professionals, patients have to rely on whoever is available, regardless of qualifications. As per a WHO report, only one in five doctors in rural India is qualified to practice medicine, highlighting the prevalent issue of quackery. 

The way ahead

Strengthening the healthcare sector hasn’t received the priority it needs, as the sick reach the hospitals only after quacks, faith-healers, and unqualified practitioners fail to help them. The rapidly ageing population needs accessible, affordable, and good-quality public health services. There are many issues that require attention and an immediate fix, such as the following:

 •    Awareness: It’s a problem commonly faced while promoting healthcare services. Mass awareness is crucial; even if treatment is provided for free, its availability should be communicated at the grassroots level – along with information on symptoms of various diseases, their complications, and repercussions. Without adequate communication, there’s no guarantee that the masses would avail of these services.
    •    Healthy partnerships: Partnership between pharmaceutical companies, NGOs, the government, and other stakeholders is important in providing better access to healthcare for the masses. Also, innovative business models are required to be explored for tackling issues that are specific to India. There could be various models such as PPP, patient assistance programs, social entrepreneurship, etc. 
    •    Better primary care: Primary care serves as the foundation for a robust healthcare system. It is the first level of contact between individuals and the system. This also involves maternal and neonatal care, and includes family planning, besides the prevention and treatment of endemic diseases, health education, supply of safe drinking water and food, and provision of essential facilities.

A humble start

The Government has launched its ambitious ‘Ayushman Bharat’ scheme to benefit lakhs of poor families in India. This health policy for the socio-economically underprivileged would potentially benefit around 500 million people by providing them with annual health insurance of up to Rs 5 lakh. It’s a commendable attempt to ensure that universal healthcare is accessible to all.

Disclaimer: The opinions expressed in this article by Sandeep Kanoi are his own, and do not necessarily reflect those of or its owners.

Writer Profile: Mr. Sandeep Kanoi is a Practicing Chartered Accountant from Mumbai. He has been associated with right from the start of the website. Currently, he is also the CEO of Taxguru Consultancy & Online Publication LLP. He has more than 17 years of experience in the field of Taxation, Accounting, Finance, Audit and Corporate Law.


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