Out-Of-Pocket Spending In Total Health Expenditure Falls To 39.4% In 2021-22

The increase in government spending on health has led to a nearly 25 percentage point decrease in the share of out-of-pocket expenditure in the total health expenditure between 2014-15 and 2021-22, according to government data released on Wednesday.

In per capita terms, the government health expenditure has tripled from Rs 1,108 to Rs. 3,169 from 2014-15 to 2021-22, according to National Health Account estimates for India 2020-21 and 2021-22.

The government spending on health between 2019-20 and 2020-21 increased by 16.6%, while between 2020-21 and 2021-22, it grew by an unprecedented rate of 37%, highlighting the proactive role played by the government in tackling the Covid-19 pandemic, the health ministry said.

The increase in government spending on health has an important implication for the reduction of financial hardship endured by households, it stated.

"In the total health expenditure of the country between 2014-15 and 2021-22, the share of GHE has increased from 29% to 48%."

"During the same period, the share of OOPE in the total health expenditure declined from 62.6% to 39.4%," the data stated.

"The continuous decline in the OOPE in the overall health spending vindicates the substantial efforts made by the government in the progress towards ensuring financial protection and universal health coverage for its citizens," the ministry said.

Dr V K Paul, Member (Health), NITI Aayog, said that the methodology taken for these NHA estimates has improved over the last nine years and has resulted in a more robust and accurate account of the government's expenditure on health.

"The decline in out-of-pocket expenditure out of total health expenditure from 64.2% in 2014-15 to 39.4% in 2021-22 reflects a very positive indicator,' Dr Paul said.

Dr Paul highlighted that more than Rs 1 lakh crore savings have accrued from the Ayushman Bharat PMJAY and this has had a positive impact on the recent NHA estimates.

He also stated that other schemes like the Free Dialysis scheme, launched in 2015-16 has benefited 25 lakh people.

Union Health Secretary Apurva Chandra said "a substantial increase has been noticed in the health expenditure of the government while the out-of-pocket expenditure has come down which is a good sign."

He highlighted that the total health expenditure has also made a significant increase which reflects the emphasis of the government towards health.

The NHA estimates are based on the globally accepted framework of 'A System of Health Accounts (SHA), 2011' which facilitates inter-country comparisons.

This report provides a systematic description of the financial flows in India's health system by different sources, how the money is spent, how healthcare is provided, and the nature of healthcare services that are used.

The NHA estimates for 2021-22 show that government expenditure for healthcare continues to increase in the country, highlighting the efforts of the government to increase public investments in the health sector.

The share of GHE in the overall GDP of the country has increased from 1.13% in 2014-15 to 1.84% in 2021-22, the data showed.

In terms of share in the General Government Expenditure, it has increased from 3.94% in 2014-15 to 6.12% in 2021-22.

Another positive trend in the country's health financing space is the increase in Social Security Expenditure (SSE) on healthcare, the ministry said.

"This increase in social security has a direct impact on reducing out-of-pocket payments. A robust social security mechanism ensures that individuals will not face financial hardship and the risk of poverty as a consequence of accessing essential healthcare services," the ministry said.

The share of SSE on health, which includes government-funded health insurance, medical reimbursement to government employees, and social health insurance programs, in the total health expenditure has increased from 5.7% in 2014-15 to 8.7% in 2021-22, it added.