Universal health coverage – The goal’s nowhere in sight

This article is authored by Janak Raj, Senior Fellow, Centre for Social and Economic Progress, New Delhi.

The ministry of health and family welfare (MoHFW) recently released national health accounts (NHA) estimates for India for 2019-20. These estimates are extremely useful for assessing health financing in the country. NHA estimates suggest that health spending remains low in the country, with relatively neglect of primary healthcare. Therefore, it is hard to assess when and how we will be able to achieve the goal of universal health coverage (UHC) articulated in the National Health Policy, 2017. UHC, which implies access to quality health services without incurring financial hardship, is also crucial for achieving the Sustainable Development Goals.

Healthcare (For representation)

The latest NHA estimates place public health spending at 1.35% of Gross Domestic Product (GDP), which is one of the lowest in the world. It is shocking that public health spending in India increased by only 0.4 percentage point of GDP over the last 15 years between 2004-05 and 2019-20.

NHP 2017 articulated to raise public health spending to 2.5% of GDP by 2025 (from the then 1.15%). Though this target was to be achieved in a time bound manner, no roadmap was laid out. As a result, public health expenditure increased only by 0.20 percentage point of GDP in three years following the announcement of the policy. Likewise, NHP 2017 policy stated to increase state sector health spending to > 8% of their budgets by 2020. However, on an average, states spend only about 5% of their total expenditure on health, with many states spending even less than 5 per cent. Over last three years, public health expenditure relative to general government expenditure declined (from 5.1% in 2017-18 to 5.0% in 2019-20), instead of improving.

A comprehensive and quality primary health care is at the core of realising the goal of UHC for all. NHP 2017 had stipulated to allocate two-thirds or more to primary health care, but the ratio improved marginally from 54.7% in 2017-18 to 55.9% in 2019-20. Primary health care continues to be neglected, with a large shortage of health manpower, especially in rural areas. At primary health centres, 37% of the sanctioned posts of health assistants and 24% of the sanctioned posts of doctors were vacant in 2022. Relative to the requirement, there was a shortfall of as much as 80% of specialists such as surgeons in community health centres.

With such a low public health spending, it is unclear as to how and when we will be able to achieve the goal of UHC. It is significant that the idea of some form of UHC in India was first mooted by the Bhore Committee, which submitted its report way back in 1946. One of the key recommendations of the Bhore Committee was a national health system (NHS) for delivery of comprehensive preventive and curative allopathic services through a rural-focused multi-level public system financed by the government of which all the individuals would be able to reap the benefit, irrespective of their ability to pay. However, India at the time of independence could not afford NHS as it faced multiple challenges such as (i) widespread poverty; (ii) high morbidity and mortality due to several communicable diseases; and (iii) a fragile economy.

There is no counterfactual to suggest as to where our health care system would have been today, had we implemented the NHS. However, around the same time when the Bhore Committee submitted, the United Kingdom (UK) enacted a National Healthcare Service Act in 1946 to secure improvement in the health of the people and the prevention, diagnosis, and treatment of illness. This led to a massive boost in public health spending in the UK. The gap between public health spending to GDP ratio between India and the UK, which was 2.3 percentage points of GDP in 1960, widened to 6.6 percentage points in 2019. Three is no denying that the tax-GDP ratios and, hence, financial capacity to spend on health in two countries is different. However, many other developing economies with lower economic growth than India such as Mexico could make good make good progress towards UHC by boosting their public health spending. India lags many of its peers in the UHC index, let alone advanced economies. India is at least 14 years behind China in the UHC index. India, which was ahead of Indonesia in UHC in 2000, is almost at par with it now.

The goal of UHC will remain elusive as long as public health spending is low. Globally, public health spending for UHC systems averages around 6% of GDP. International evidence also suggests that public spending on health would need to be raised to at least 5% of GDP for progressing towards UHC. Thus, the only way to achieve the goal of UHC is to step up public health spending in a time-bound manner. Both the central and state governments need to commit that in every single year, health spending will rise by at least 0.2 percentage point of GDP until it reaches at least 3% of GDP. For this to materialise, public health expenditure will need to grow every year by 22-23% (from the existing growth rate of 15%) in the next 7-8 years, assuming nominal GDP growth of 11%. At this rate, we can reach the target of 3% of GDP in next 7-8 years, which is the average public health spending to GDP ratio of low- and middle-income countries. Once we reach this stage, our next target should be to raise the public health spending gradually to 5% of GDP. Of course, money would also need to be spent efficiently. It is only then we can achieve the goal of UHC and close the gap with our peers.

This article is authored by Janak Raj, Senior Fellow, Centre for Social and Economic Progress, New Delhi.