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  • 28 June, 2021

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Household spending on health

Household spending on health

The World Health Organization (WHO) provides data on the percentage of the total population where the household expenditure on health was greater than 10% and 25% of the total household expenditure or income in India in 2011. This provides a clear picture of the status of spending on health by the rural and urban populations.

Population, that spent more than 10% of their income (out of their pocket) on Health.

  • 17.33% of the population in India made out-of-pocket payments on health.
  • The percentage was higher in rural areas compared to urban areas.
  • Globally, the average was 12.67%.
  • In Southeast Asia, 16% spent more than 10% of their household income on health.
  • The Western Pacific region came second in the list of regions that saw a rate higher than the global average.

Population, that spent more than 25% of their income (out of their pocket) on Health

  • 3.9% of the population in India made more than 25% of out-of-pocket payments on health, with 4.34% in the rural areas.

Economic Survey of India 2019-20

  • The Economic Survey of India 2019-20 has outlined the fact that an increase in public spending from 1% to 2.5-3% of GDP, as envisaged in the National Health Policy of 2017, can decrease out-of-pocket expenditure from 65% to 30% of overall healthcare expenses.

  • This is where the importance of alternate sources of health financing in India needs to be stressed.
  • The COVID-19 pandemic has also forced countries all over the world to rethink climate change and the need for the preservation of the environment.
  • Fiscal reforms for managing the environment are important, and India has great potential for revenue generation in this aspect.

National Health Profile (NHP) 2018

  • According to the latest National Health Profile (NHP) 2018, India is among the countries with the least public health spending. The Indian government plans to live up to its promise of 'health assurance to all Indians' with a health spending of just Rs 3 per person per day that counts for 1.02 per cent of the GDP.

  • India's per capita public expenditure on health increased from Rs 621 in 2009-10 to Rs 1,112 (around $16 at current exchange rate) in 2015-16. However, it is still nominal, compared with other countries. Switzerland spends $6,944 on health per capita, the United States spends $4,802 and UK $3,500.
  • India is one of the countries with the lowest public health spending(0.9%). Even lower-income countries like Bhutan, Sri Lanka and Nepal spend 2.5 per cent, 1.6 per cent and 1.1 per cent of the GDP respectively on their people’s health.

National Health Accounts (NHA) estimates 2014-15.

  • According to the National Health Accounts (NHA) estimate for 2014-15, the Government Health Expenditure (GHE) per person per year is only Rs 1,108 that comes to Rs 3 per day. This is in contrast to the Out-of-Pocket Expenditure (OPE) of Rs 2,394, which comes out to be 63 per cent of the total health expenditure.

State Wise Findings

  • Mizoram's per capita health expenditure is Rs 5,862, almost five times the Indian average, with the state spending 4.2 percent of its GDP on health in 2015.
  • Arunachal Pradesh (Rs 5,177) and Sikkim (Rs 5,126) followed at the top.
  • At the other end of the spectrum, Bihar spent Rs 491 per capita on health -less than half the Indian average- spending 1.33 per cent of its GDP on health.
  • Just above Bihar were Madhya Pradesh (Rs 716) and Uttar Pradesh (Rs 733).
  • Delhi spends Rs.1,992 per capita on health.

WHO's Health Financing Profile for 2017 shows 67.78% of total expenditure on health in India was paid out of pocket, while the world average is just 18.2%

  • Of more than three lakh crore rupees that households spent on health in 2014-15, around 43 per cent of the total out-of-pocket spending (OOP) went in buying medicines.
  • In private hospitals, households spent around 28 per cent of the OOP spending. Much of this problem of debt can be solved if medicines are made available to people at affordable prices.
  • The National Health Policy 2017 also highlighted the need for providing free medicines in public health facilities by stepping up funding and improving drug procurement and supply chain mechanisms.

The Union Health Ministry reveals that medicines are the biggest financial burden on Indian households.

  • One of the central problems has been the low levels of public spending on health, and as a, result the poor access to affordable and good quality healthcare for the majority of India’s population.
  • The National Crime Records Bureau says that 0.38 million people committed suicide in India between 2001 and 2015 due to the lack of treatment facilities. This is 21 per cent of the total suicides in that time.
  • According to National Sample Survey Office (NSSO), outstanding loans for health reasons doubled between 2002 and 2012.
  • In India, low health spending is pushing people towards the private sector for their healthcare needs since India stands sixth in the out-of-pocket (OOP) health spending among the low-middle income group of 50 nations.
  • The result of that, about 55 million Indians were pushed into poverty in a single year because of having to fund their own healthcare and 38 million of them fell below the poverty line due to spending on medicines alone.

Source: TH DTE

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