Is India's healthcare future ready? What does Economic Survey 2020-21 point at

Failure of the existing healthcare system suggests that there is a need to rethink health policy

By Vibha Varshney
Published: Saturday 30 January 2021
Photo: Prashant Ravi / CSE
Photo: Prashant Ravi / CSE Photo: Prashant Ravi / CSE

The Economic Survey released January 29, 2021 has recommended that public health spending in India should increase to 2.5-3 per cent of gross domestic product (GDP) from around one per cent.

The survey also shows that the expenditure on health went up from 1.4 per cent of the GDP to 1.5 per cent and 1.8 per cent in the years 2018-2019, 2019-2020 and 2020-2021 respectively.

Despite this increase, a ‘COVID-19 Emergency Response and Health Systems Preparedness Package’ of Rs 15,000 crore had to be provided. This suggests that the healthcare system has to be improved and more money is needed.

There has been a demand for increasing investment in the healthcare system for decades now. The National Health Policy 2017 too had suggested an increase to 2.5 per cent of the GDP by 2025.

But this policy also supported privatisation of healthcare and much of the public fund was used to purchase services from the private providers via the insurance system. There were also steps to privatise  the primary health centres in Rajasthan in 2017. In 2020, there was a plan to give district hospitals to private medical colleges.

The fact that such privatisation has not worked is supported by the failure of the private sector to deal with the novel coronavirus disease (COVID-19) pandemic.

The experience shows that the sector has failed to provide succour to patients during the pandemic. There are reports of malpractice and patients being overcharged. Though the government placed a cap the cost of treatment, many private providers refused to follow these guidelines.

In light of such failures, it is important to rethink the health policy and contextualise the role of private sector in India’s healthcare system. But most importantly, it has to be ensured that the increased funds are used to improve and strengthen the public health system.

This would help people. Investment in the public sector would reduce the out of pocket expenditure to 30 per cent of overall healthcare spend from 65 per cent. This would ensure that people do not slip into poverty because of health expenditures.

While India’s health system will flourish if money is injected into the public health system, a mere three per cent of GDP might not be sufficient to build the public health system. In 1946, the Bhore Committee had suggest that 12 per cent of the GDP be used to build up the health system. Obviously, we need to aim higher.

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