According to the Economic Survey 2023, the share of government expenditure in Total Health Expenditure (THE) has increased over time from 28.6% in FY14 to 40.6% in FY19. However, OOPE is still higher at 48.2% of the total expenditure.
Total health expenditure constitutes current and capital expenditures incurred by the government and private sources, including external funds. Out-of-pocket expenditure is the amount of expenses directly made by households at the point of receiving healthcare. This expenditure is usually incurred when an individual’s visit to a healthcare provider (clinic, hospital, pharmacy, laboratory, etc) is not provided for “free” through a government healthcare facility or a facility run by a not-for-profit organisation, or if this individual is not covered under a government or private health insurance or social protection scheme.
Though government expenses have been rising, it has not been able to bring the out-of-pocket expenses below the government expenditure. According to the Economic Survey 2023, the National Health Account (NHA) estimates for FY19 show that there has been an increase in the share of Government Health Expenditure (GHE) in total GDP, from 1.2% in FY14 to 1.3% in FY19.
GHE constitutes spending under all schemes funded and managed by the Union, state and local governments, including quasi-government organisations, and donors in case funds are channelled through government organisations.
The social security expenditure on health — which includes the social health insurance programme, government-financed health insurance schemes, and medical reimbursements made to government employees — has increased from 6% in FY14 to 9.6% in FY19. Due to several such steps, OOPE as a percentage of THE has declined substantially from 64.2% in FY14 to 48.2% in FY19.
Overall, for FY19, the total health expenditure for India is estimated to be Rs 5.96 lakh crore, which is 3.2% of GDP in the corresponding year. Current Health Expenditure (CHE) is Rs 5.40 lakh crore (90.6% of THE) and capital expenditures is Rs 56,194 crore (9.4% of THE). Within the government health expenditure, the Union government’s share is 34.3% and the state governments’ share is 65.7%.Aligning with the focus on providing healthcare services to all, which comprises one of the policy recommendations of the National Health Policy 2017, the government is focusing on primary healthcare expenditure, which has increased from 51.1% in FY14 to 55.2% in FY19. This not only ensures quality services at the grassroot level but also reduces the chances of ailments requiring secondary or tertiary healthcare services. Between FY14 and FY19, the share of primary and secondary care in the GHE increased from 74.4% to 85.7%. On the other hand, the share of primary and secondary care in private health expenditure has declined from 82.0% to 70.2% during the same period, stated the Economic Survey.