On February 9, 2015, the Wall Street Journal (WSJ) reported, “India’s statistics ministry surprised economists when it unveiled the new numbers for the growth of India’s gross domestic product. It ratcheted up India’s GDP growth figures using a new methodology that pegs expansion in Asia’s third-largest economy at 7.5 percent last quarter and 8.2 percent the quarter before that. Economists and the ministry, using the old methodology, had originally said growth was closer to 5.5 percent during those quarters. This recalculation indicates that India has already dethroned China as the world’s fastest-growing big economy, though China’s economy is still four times the size of India’s.”
For Indians in particular, this has indeed been a significant ‘feel good factor’.
However, keeping this ascending GDP growth rate in perspective, when we study the current health care related data of India as compared to BRICS nations (Brazil, Russia, India, China, South Africa) or even OECD (Organization for Economic Co-operation and Development) countries, India features at the rock bottom.
In this article, I shall quickly compare some critical health care parameters of India, against the same for other BRICS countries.
At the rock-bottom on healthcare:
This becomes absolutely clear when we look at the recent data on ‘Health Status’ of BRICS Nations, as follows:
Health Status of BRICS Nations (2013*)
|Life Expectancy at Birth||Infant Mortality per 1,000 Live Births||Child Mortality under 5 per 1,000 Live Births||Maternal mortality ratio (per 100 000 live births)|
* Life expectancy at birth data is of 2012; maternal mortality ratio is of 2010; all the others are of 2013. Source: Health and Health Care in BRICS Nations by Victor G. Rodwin, Wagner School of Public Service, New York University,
The legacy factor:
This has not happened overnight, public health care has been getting neglected in India over a long period of time. However, the process of slowing down in this area has become more pronounced in the recent years, as we shall discuss below.
The following table based on relatively recent data on ‘Health Expenditure’ in BRICS Nations, well captures the abject lack of focus in this area, which is so vital for sustainable economic progress of India:
Health Expenditure in BRICS Nations (2012*)
|GDP Per capita (PPP)||Public Expenses on Health (% GDP)||Private Expenses on Health (%GDP)||Total Expenses on Health (%GDP)||Out-of pocket Health Expenses (% of Total Healthcare Expenditure) 1|
* GDP per capita in PPP is of 2014; Human Development Index is of 2013; the rest of the data is of 2012. 1. Calculated based on private expenditure on health (% of GDP), total expenditure on health (% of GDP), out-of-pocket health expenditure (% of private health care expenditure). Source: Health and Health Care in BRICS Nations by Victor G. Rodwin, Wagner School of Public Service, New York University.
Lowest Human Development Index:
Human Development Index (HDI) is broadly defined as a composite statistic of life expectancy, education, and per capita income indicators, which is used to rank countries into four tiers of human development. Net outcomes of both education and health care play critical roles in the statistical calculations of HDI.
Among the BRICS nations, India registers the lowest HDI at 0.586, as compared to 0.658 of South Africa, 0.719 of China, 0.744 of Brazil and 0.778 of Russia.
Source: Health and Health Care in BRICS Nations by Victor G. Rodwin, Wagner School of Public Service, New York University.
High economic costs of neglect to health care:
An April 30, 2015 article of Reuters stated that over 60 percent of deaths in India are due to non-communicable diseases (NCDs) such as cancer, diabetes, chronic respiratory and cardiovascular diseases, which are responsible for about 70 percent of spending on healthcare. They also make serious adverse impact on the economic health of the country, with NCDs and mental illness expected to cost India US$ 4.58 trillion between 2012 and 2030.
This, by all means, creates a high priority situation, which needs to be addressed with commensurate well thought-out policy measures backed by adequate budgetary support.
The condition assumes even greater significance, as healthy and well-productive workforces contribute immensely to high and sustainable economic growth aspiration of a nation, always.
Healthcare budget gets further axed:
To meet the expectations of many, when the incumbent government is trying to floor the gas pedal for accelerated economic growth of the country, requisite budgetary allocation for quality and affordable healthcare in India, continues to lag behind.
On the contrary, in December 2014, just prior to the Union Budget Proposal 2015-16, the new Government reportedly ordered more than Rs 6,000 Crore or US$948 million cut (20 percent) from its own healthcare budget allocation of around US $5 billion for the financial year ending March 31, 2015, due to financial constraints.
In 2014-15, the finance ministry also ordered a spending cut of around 30 percent to US$ 205.4 million on India’s HIV/AIDS program.
Then came the Union Budget proposal 2015-16. Interestingly, even after several well publicized announcements by the Government on the ‘National Health Assurance Mission’, with generous promises on rejuvenation of public health care services sooner, the budget ignored all these – lock, stock, and barrel.
For 2015-16, the health care budget allocation was kept at Rs. 33,152 Crore, a tad more than Rs. 30,645 Crore of 2014-15. There has been no indication either for any comprehensive and integrated focus on healthcare, adequately backed by commensurate budgetary allocation, any time soon.
Could crimp efforts to control the spread of diseases:
Just around this time, a report from Reuters, quoting one of the health ministry officials, stated that this budget cut could crimp efforts to control the spread of diseases.
Interestingly, more newborns die in India than in poorer neighbors such as Bangladesh, and preventable illnesses such as diarrhea kill more than a million children every year.
This issue becomes even more glaring, when India contributing to 21 percent of the global disease burden, accounts for just a fraction of global spending on health.
What the Government promised, but did not deliver:
Before the Union Budget proposal of 2015-16, another article of Reuters dated October 30, 2014, quoting an Government announcement, reported that under the National Health Assurance Mission, Narendra Modi government would provide all citizens with free drugs and diagnostic treatment, in addition to insurance cover to treat serious ailments.
The proposed plan was to be rolled out in phases from April 2015 and was to cover the entire population by March 2019. The project would reportedly cost an estimated US$11.4 billion annually, when the entire population of the country comes under it.
National Health Assurance Mission was reportedly to focus, among others, on the following:
- Improving preventive healthcare services by ensuring adequate availability of medical practitioners in rural areas.
- Creating new infrastructure under existing welfare programs.
- Providing tertiary care services through an insurance-based model with the government offering more than 50 drugs free to all the citizens.
- Offering in the package, along with the drugs, about 12-15 diagnostic treatments.
- Encouraging the State Governments to enter into outsourcing agreements for the provision of treatment.
All admirers of the new dispensation felt greatly obliged for this announcement. It was to some extent fulfillment of a long awaited expectation for a just and efficient healthcare system in India.
Adding strength to the Government’s promise, it was also reported that the World Bank along with UK’s health cost-effectiveness agency NICE are assisting India in this regard, providing technical assistance and advice on treatments the government should offer in its health care package.
However, at the end of the day nothing got translated into reality, at least not just yet.
Patients are compelled to turn to expensive private sector providers:
At around 1.3 percent of GDP, India’s public health expenditure is already among the lowest in the world, even as compared to 1.4 percent of Bangladesh, 1.6 percent of Sri Lanka and 2.9 percent of Thailand.
It is noteworthy that the public sector is the main source of health funding in nearly all OECD countries. However, in India, only 33 percent of health spending was funded by public sources in 2012, a much lower share than the average of 72 percent in OECD countries.
Moreover, health accounted for only 4.8 percent of total government spending in 2012, significantly lower than the 14.4 percent across OECD countries.
A January 2015 paper titled, “Improving Health Outcomes And Health Care In India”, published by the OECD reconfirms that with India’s low life expectancy largely reflecting deaths from preventable diseases, the most significant gains in health would come from population-wide preventive measures.
The paper highlights that except a small number of states, overall access to public health care services in India is rather poor even today, resulting in many people turning to more expensive private-sector providers, who mainly serve those who can pay.
A quick comparison between public and private health care expenditure:
For a quick comparison between public and private health care expenditure, I shall refer to a very recent Government survey report.
This survey titled, “Key Indicators of Social Consumption in India Health” was conducted by the National Sample Survey Office (NSSO) under the Ministry of Statistics and Program Implementation of the Government of India from January to June 2014 period and was published in June 2015.
The following table prepared from the above NSSO survey, is an example that would highlight the extent of difference in the average medical expenditure per hospitalization between a public and a private sector hospital.
Average Medical Expenditure Per Hospitalization/Case in Public And Private Hospitals
|Broad ailment category||Public (Rs.)||Private (Rs.)|
|Obstetric and neonatal||2651||21626|
|Psychiatric & neurological||7482||34561|
|Blood diseases (including anemia)||4752||17607|
|Endocrine, metabolic & nutrition||4625||19206|
Need to garner resources to implement ‘National Health Assurance Mission’:
The High Level Expert Group (HLEG), constituted by the erstwhile Planning Commission in January 2011, under the chairmanship of Dr K. Srinath Reddy, produced a comprehensive report on ‘Universal Health Care (UHC) in India’ in November 2011.
On health financing, HLEG made 10 recommendations, where from I would quote just two as follows:
- Government (Central government and states combined) should increase public expenditures on health from the current level of 1.3 percent of GDP to at least 2.5 percent in the first 5 years and to at least 3 percent of GDP by the next 5-year period.
- Use general taxation as the principal source of health care financing – complemented by additional mandatory deductions for health care from salaried individuals and taxpayers, either as a proportion of taxable income or as a proportion of salary.
I reckon, to meet the budgetary needs for ‘National Health Assurance Mission’ both direct and indirect taxes require to be levied if possible, at least in the next budget, along with adequate incentives to the State Governments to do the same.
Over a period of time, economic aspirations of India have grown by manifold and very rightly so. To achieve these aspirations, alongside, at least two critical social needs such as ‘Education’ and ‘Health Care’ must be focused on simultaneously. I underscore ‘simultaneously’. There does not seem to be any alternative either, if we want to ensure that Indian aspirations do not remain just a pipe dream, for long.
It does not give any pride to many when one witnesses India topping the league table of GDP Growth percentage, while continuing to remain at the rock bottom so far as the health care is concerned.
Education and health care are universally considered as the bulwark for sustainable progress and growth of any nation. Even all BRICS countries have realized and implemented that, being well ahead of India in those fronts, unquestionably.
Let’s believe and hope, India would not continue to neglect these two critical growth catalysts of any nation, for long, while trying to build a robust economy. Otherwise, pushing hard only for economic growth as a percentage of GDP, could well be akin to chasing a rainbow, if not creating an unsustainable bubble with disastrous consequences, in the long run.
By: Tapan J. Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.