Health account numbers that require closer scrutiny

News: The Ministry of Health and Family Welfare has released the National Health Accounts Report for 2017-18.

How does NHA capture data? 

NHA captures health data like out-of-pocket expenditure, insurance premiums from various sources like the “Household social consumption in India: Health” survey of the National Sample Survey Organization.

What are the challenges associated with the credibility of NHA data?

NHA estimate shows that out-of-pocket expenditure as a share of GDP has reduced. But this does not mean improved financial protection. NSSO 2017-18 data shows that utilization of hospitalization has declined, which has resulted in reduced Out-of-pocket expenditure.

This could also be due to the fact that the NSSO survey happened immediately after demonetization and GST, which had reduced the purchasing power of the people. Another factor that could explain this is the fact that NSSO estimates fail to capture the richest 5% of the population. Thus, it could be an underestimate.

What is the government spending on health? What do the NHA data signify?

India’s total public spending on health as a percentage of GDP or in per capita terms has been one of the lowest in the world. The share of current health expenditure has gone down to 88% compared to 92.8% in 2016-17.

Since NHA 2017-18 the expenditure on health has increased and the majority of the increase has been from the contribution of the union government. But the overall increase has only been from 0.27% in 2016-17 to 0.32% of GDP.

Much of this increase is because of the tripling of expenditure of the Defence Medical Services (DMS). This increase benefits only a particular section and not the general population, especially the health of women in the reproductive age group and children below five years who need it the most.

Several policies suggested increasing the public spending to at least 2.5% of GDP. However, it still continues to hover around 1-1.2% of GDP.

Source: This post is based on the article “Health account numbers that require closer scrutiny” published in The Hindu on 8th December 2021.