01 Feb 2018 19:28 IST

Funding and execution challenges

The allocation to healthcare sector in the budget has risen by a meagre 2 per cent

The change

The allocation to healthcare sector in the budget has risen by a meagre 2 per cent from ₹53,294 crore in 2017-18 to ₹54, 600 crore.

However, the announcement of the National Health Protection Scheme as part of Ayushman Bharat is a major initiative. Secondly, allocation of ₹1,200 crore for providing comprehensive healthcare to the people through health and wellness centres is a welcome move. The Government has also allocated additional ₹600 crore to provide nutritional support to all TB patients.

Further, the Government has announced setting up of 24 new government medical colleges and hospitals by upgrading existing district hospitals in the country.

The background

Poor funding and poor management of health funds had been a cause of concern in the Indian healthcare sector. Government spending on healthcare in India was around 1.4 per cent of GDP in 2017-18 (Economic Survey 2017-18). As per the data published by the World Health statistics 2017, the overall spending on healthcare and essential services by the Central and States Governments in India was around 5 per cent of the government total expenditure.

However, the announcement of National Health Protection Scheme is a commendable initiative. The scheme is proposed to cover over 10 crore poor and vulnerable families (approximately 50 crore beneficiaries), providing coverage up to ₹5 lakh per family per year for secondary and tertiary care hospitalisation. This will also enable the underprivileged to have access to quality healthcare system.

So far, the low insurance cover led to very high out-of-pocket expenditure on health, depriving a large number of households. The report from National Health Accounts 2014-15 revealed that around 67 per cent of the total spending on health is household out-of-pocket expenditure.

However, funding this scheme can be challenging for the government. It will have to shell out huge subsidy as premium to make it viable for insurance companies. The insurance players and hospitals stand to gain from the schemes.

Setting up of 24 new government medical colleges and hospitals by upgrading existing district hospitals is a welcome move, given the severe shortage of doctors and healthcare infrastructure.

Allocation of ₹1,200 crore for providing comprehensive healthcare to the people through 1.5 lakh health and wellness centres is expected to bring healthcare system closer to the homes of the people. These centres will provide comprehensive healthcare for non-communicable diseases and maternal and child health services as well. These centres will give free essential drugs and diagnostic services.

The verdict

India needs more investment for strengthening the healthcare system. Though there are bold initiatives in the Budget announcement, funding and execution seems to be the challenging task.

(The story first appeared in The Hindu BusinessLine.)

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