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Health account numbers that require closer scrutiny

Context:

National Health Accounts (NHA) report for 2017-18 released shows an increase in public spending on health and a decline in out-of-pocket expenditure.

Relevance:

GS-II: Social Justice and Governance (Issues related to Health, Government Policies and Initiatives)

Dimensions of the Article:

  1. Highlights of the National Health Accounts (NHA) report 2017-18
  2. Issues with National Health Accounts (NHA) report for 2017-18

Highlights of the National Health Accounts (NHA) report 2017-18

  • National Health Accounts (NHA) 2017-18 clearly shows an increase in the share of government health expenditure in the total GDP of the country. It has increased from 1.15% in 2013-14 to 1.35% in 2017-18 (finally breaking through the 1%-1.2% mark of GDP).
  • Government Health Expenditure as a percentage of overall health expenditure has also increased over time. In 2017-18, the share of government expenditure was over 40%, which is much higher than the percentage in 2013-14 (Less than 30%).
  • Between 2013-14 to 2017-18, in per capita terms, the government health expenditure has increased by almost 70% (from Rs 1042 to Rs 1753).
  • Out-of-pocket expenditure as a percentage of total health expenditure has come down to just below 50% in 2017-18 from almost 65% in 2013-14 due to the rise in Government Health Expenditure.

Issues with National Health Accounts (NHA) report for 2017-18

Problem in accounting capital expenditure

  • Counting the capital expenditure by NHA for a specific year leads to severe overcounting as the capital expenditure incurred is used for the lifetime of the capital created and the use does not get limited to that particular year in which expenditure is incurred.
  • If we take out the capital expenditure, current health expenditure comes down to only 0.97% of GDP. This is only a marginal increase.

Incorrect relations of Public spending and benefit of population

  • Increased public spending on health care may not benefit the general population.
  • Much of this increase has actually happened on account of a tripling of expenditure of the Defence Medical Services (DMS).
  • Though the increased spending for the health of defence personnel is a good thing, such spending does not benefit the general population.

False sense of improvement regarding decline in out-of-pocket expenditure

  • The decline in out-of-pocket expenditure could be due to a decline in utilisation of care.
  • NSSO 2017-18 data suggest that utilisation of hospitalisation care has declined compared to 2014 NSSO estimates for almost all States and for various sections of society.
  • The decline in out-of-pocket expenditure is essentially due to a decline in utilisation of care rather than greater financial protection or increased public spending.
  • NSSO survey happened just after six months of demonetisation and almost at the same time when the Goods and Services Tax was introduced.
  • As purchasing power declined, after demonetisation, healthcare would have become more unaffordable, forcing people to forgo care.

-Source: The Hindu

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September 2022
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