HEALTH ACCOUNTS

Background

• The system of health accounts is an international accounting framework for systematically tracking health spending. 
• Time trends of overall health spending and its components guide future policies and investments to make health systems more responsive to people’s needs. 
• They are essential for improving the performance of health systems while enhancing transparency and accountability. 

• Accordingly, the demand for timely, accurate, and comprehensive data on health expenditures has been increasing at both the country and global levels.

Health account statistics of India according to NFHS

• According to the National Health Accounts Estimates 2018-19, government spending as a percentage of total health expenditure increased by more than 11 percentage points over the previous five years, from 23.2% in 2013-14 to 34.5% in 2018-19.
• The National Health Accounts (NHA) Estimates describe the country’s total expenditure on healthcare whether by the government, the private sector, individuals, or NGOs and the flow of these funds.
• It answers questions such as what are the sources of healthcare spending, who manages this spending, who provides healthcare services and which services are utilized.

Dominant findings of the Report

• One of the most important findings of the 2018-19 report is that government spending as a proportion of the country’s Gross Domestic Product (GDP) went down to 1.28% from 1.35% in the previous year’s(2017-18) report. 
• The total health spending including spending by both government and non-government agents declined from 3.9% of the GDP to 3.2% in the five years up to 2018-19.
• The decrease in government spending as a percentage of GDP was bound to happen because of using a wrong indicator that is internationally not comparable. 
• The comparable indicator would be the current health expenditure, which does not include the capital spending on, say, buildings or equipment that will be used over multiple years till they last.
• Since considering the total expenditure, what happened is the previous report also considers the large spending by the Defence Ministry on equipment.
• But that was one-time spending, hence the total public spending has reduced.
• More importantly though, the 2018-19 report shows that the massive fall in out-of-pocket expenditure by patients at the point of care recorded in the previous report has been sustained.

The concern of Out of Pocket Expenditure

• An out-of-pocket expense is a payment you make with your own money even if you are reimbursed later.
• In terms of health insurance, out-of-pocket expenses are your share of covered healthcare costs, including the money you pay for deductibles, copays, and coinsurance.
• Health insurance plans have an out-of-pocket maximum that caps the amount you pay each year for covered healthcare expenses.
• With healthcare services in the country largely provided by private players, one of the most important health account measures is out-of-pocket spending and here, the figures have been moving in the right direction.
• People paying for healthcare expenses out-of-pocket made up for 48.2% of the total health expenses in the year 2018-19, down from 48.8% in the previous year (2017-18).
• The out-of-pocket expense has decreased substantially from the 62.6% recorded in 2014-15.
• This fall is good because India’s out-of-pocket expenditure continues to be high in comparison to other countries in the region.
• In 2017, India was in 66th position out of 189 countries, with $100.05 per capita out-of-pocket spending, according to data from the Global Health Expenditure Database (annexure in the report).

Other Asian Countries 

Developed Countries 

Current health care expenditure

• The current health expenditure not accounting for any expenses that can be utilised over a few years stood at Rs 5.4 lakh crore, which was 90.6% of the total health expenditure. 
• The Centre’s share in the current health expenditure stood at 11.71%, state governments accounted for 19.63%, local bodies 1.01%, and households (including insurance contributions) 60.11% of the current health expenditure. 
• The rest was accounted for by corporates (as insurance contributions), NGOs, and external or donor funding.

 Healthcare challenges in India

• The following are the major problems of health services
• Neglect of Rural Population
• Emphasis on Culture Method
• Inadequate Outlay for Health
• Social Inequality
• Shortage of Medical Personnel
• Medical Research
• Expensive Health Service

Need of the Hour

• Encouraging innovation and manufacturing (of medical devices) within the country.
• Spending more on medical research.
• Improving medical, nursing and technical education as well as upskilling of existing manpower.
• International collaborations.

For Prelims & Mains