No direct correlation between health expenditure and COVID outcomes: Report

By: |
November 30, 2020 10:11 PM

Citing data from across states, India Ratings and Research said state governments need to galvanise the local bureaucracy and leverage both the soft and hard infrastructure, along with the healthcare spends, for favourable outcomes on this front.

Most districts in India are comfortable in terms of hospital infrastructure, but the government still needs to ramp up health infrastructure.Most districts in India are comfortable in terms of hospital infrastructure, but the government still needs to ramp up health infrastructure. (Representative image)

Amid growing calls for upping healthcare spends after the experience of the pandemic, a rating agency on Monday said that there is no direct correlation between increased outlays and COVID-19 related outcomes.

Citing data from across states, India Ratings and Research said state governments need to galvanise the local bureaucracy and leverage both the soft and hard infrastructure, along with the healthcare spends, for favourable outcomes on this front.

It said the COVID-19 pandemic has brought the health care expenditure particularly the public expenditure at the centre stage due to its unprecedented impact on life and livelihood across the globe and added that the International Monetary Fund has asked all advanced countries to make healthcare a policy priority.

The agency said health care should be both near-term and long-term priorities, as the country’s total health expenditure of 3.8 per cent of GDP in FY17 is much lower than both advanced economies and peer emerging economies like Brazil, China, Russia, Argentina and South Africa.

Even though both the Centre and state governments spend on healthcare, the agency said the Seventh Schedule of the Indian Constitution puts the primary onus of health care delivery on state governments, resulting in 70 per cent of the overall spends being done by states.

Delhi, North Eastern States excluding Assam, Himachal Pradesh, followed by Andhra Pradesh, Kerala, Assam and Uttarakhand have a high per capita government expenditure on health, while Bihar, West Bengal, Jharkhand, Uttar Pradesh, Madhya Pradesh and Maharashtra having a low per capita government expenditure on health, it said.

Assam and Delhi have achieved National Health Policy 2017’s goal of devoting 8 per cent of revenue expenditure to healthcare, but have different performance on COVID deaths.

As against India’s average of 1 death per 10,000 population, Delhi’s ratio was 4.7 deaths for 10,000 population while the same for Assam was 0.3 deaths for the same number of people, it said.

Similarly, Maharashtra has a higher number of doctors per 10,000 population at 14.1 as against a national average of 8.9, but has a higher death rate of 3.8 per 10,000 population, data collated by the agency said.

A significant part of the health care cost in India has to be borne by non-governmental entities, of which out of pocket expenses of households (including medical insurance) accounted for 2.2 per cent of the GDP and the remaining 0.4 per cent was accounted for by non-governmental organisations/ external donor/local bodies, it said, citing official data of FY17.

The share of government in the current expenditure on health in India is only 27.1 per cent and a large share of 62.4 per cent is borne by households, it said.

“It is a well-known fact that such a high share of out of pocket expenses imposes a financial hardship on household budgets and more than often pushes vulnerable households into debt and poverty,” it said.

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