Budget 2019: Ayushman Bharat key programme; what data suggests on need to speed healthcare reforms

Published: July 4, 2019 10:55:27 PM

Union Budget 2019: With renewed focus of the Central Government on healthcare over the last 5 years, India's healthcare expenditure has increased.

Budget 2019: Ayushman Bharat key programmeUnion Budget 2019: The flagship programme Ayushman Bharat had a 60% increase in allocation in the Interim Budget 2019.

Union Budget 2019: With renewed focus of the Central Government on healthcare over the last 5 years, India’s healthcare expenditure has increased from 0.9% of GDP in 2016 to 1.28% in 2017-18. Despite the increasing trend, the overall health expenditure remains one of the lowest amongst the BRICS countries and significantly lower than the world average of 7.4%.

The flagship programme Ayushman Bharat had a 60% increase in allocation in the Interim Budget 2019. The pace of penetration of the insurance component has been slow, with around 35% coverage in government hospitals and less than 10% of private hospitals in India. Apart from the insurance component, the programme also has a component on strengthening of primary level (HWCs, PHCs), secondary level of care (CHCs & SDHs) and first referral units (FRU’s). The success of this component can lead to better long-term benefits for the entire healthcare sector.

Budget 2019: Ayushman Bharat key programmePublic expenditure on healthcare as a percentage of GDP. Source: World Bank data, 2016

According to National Health profile 2018, there is only 1 allopathic doctor per 11,082 people as against WHO recommended ratio of 1:1000. Further, while about 70% of India resides in rural areas, the distribution of allopathic doctors and support staff to rural areas is only 40%. Shortage in public healthcare workforce will continue to haunt us in the short-term.

Budget 2019: Ayushman Bharat key programmeWHO recommends 1 allopathic doctor per 1000 patients. Source: Census 2011 and The Health workforce in India 2016, WHO

Alternate public healthcare delivery models and use of technology could help us tide over this issue while the issue of human resources is addressed. Despite the shortage of doctors, the budgetary allocation for medical colleges was lower than previous year in the interim budget.

Budget 2019: Ayushman Bharat key programmeHospitals in India

The increased outlay required for Ayushman Bharat in the current year may see an increase in budgetary allocation to healthcare from Rs 94,064 crore in the Interim Budget.

By Ashok Varma, Leader Social Sector – PwC

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