Make health sector a priority in Budget 2022-23

Dr. Gyan Pathak
With uncertainty continues even after two years of COVID-19 crisis, India needs to replace its adhocism with a strong healthcare system, since inter-linkage of the healthcare sector to other sectors of economy has sufficiently proved. When the health sector is weak, the whole economy crumbles down. During 2020-21, and 2021-22, India had to respond to the emergency with adhoc measures and arrangements, and had not found enough resources and time to create a strong healthcare system to prepare itself for any such future.
After one year of bitter experience under the pandemic in 2020, the Economic Survey 2020-21 had said, “To enable India to effectively respond to future pandemic, the health infrastructure must be agile.” However, it was not done and the year 2021 witnessed the second wave during which beds, hospitals, drugs, doctors, medical instruments, oxygen and oxygen cylinders, medical care professionals et all were overwhelmed and hundreds of thousand died. Lockdowns and stricter containment measures put brake on all economic activities as during the first wave, and now India is undergoing the third wave, and we have again been witnessing a great economic disruption.
It is clear that failure of healthcare is dangerous for both lives and livelihoods, and therefore India is in urgent need to strengthen the whole healthcare system of the country. The glaring example is the current year’s budget provisions itself. Union Budget for 2021-22 for the Department of Health & Family Welfare was only Rs71.26 thousand crores which was a decrease of almost 10 per cent compared to the Revised Estimates of 78.86 thousand crore for the previous yeare 2020-21, though it was an increase of nearly 10 per cent to the original Rs 65.01 thousand crore Budget Estimate for the year 2020-21.
India spent 1.8 per cent of its GDP on health in 2020-21 as against in the range of 1-1.5 per cent in the preceding years. The spending was much less than what was envisaged 2.5 per cent in the National Health Policy 2017 by 2025. It should also be mentioned that an expert committee of the now dismantled Planning Commission in 2012 had suggest this level of expenditure by 2020. At that time there was no COVID-19 crisis as we are facing now, and therefore even the aims and objects and the target of the National Health Policy need to be accordingly revised and updated. The Union Budget of 2022-23 must take it into consideration, 2025 will be too late.
One should also take note of the nature of the increase of total expenditure on the health sector and the actual expenditure especially on health. Most of the year on year increases have been mostly due to the overall increase in the total budget expenditure but the actual health related expenditure was increased only marginally from 1.9 per cent of the entire budget in 2010-11 to only around 2.3 per cent in 2019-20.
Healthcare system in India depends on three pillars – Union Government, State governments, and the private sector. Since heath is a state subject, major expenditure are borne by the states. Union government’s budget in the overall public health expenditure is only a fraction. The National Health Accounts 2017 revealed that 66 per cent of spending is done by states. Overall public health expenditure for 2018-19 was Rs 2.66 lakh crore which included expenditure by the Union and the States. For the same year the allocation for National Health Mission was only Rs30,130 crore which was a 2 per cent decrease over the previous year, while in total Union Budget it was decreased from 73 per cent in 2006-07 to 55 per cent in 2018-19. The Economic Survey 2021-22 had said that merely 1 per cent increase in public health expenditure could bring down out of pocket expenditure of patients from 65 per cent to 30 per cent.
It is also well known that bulk of healthcare is provided in the country by private sector, and the COVID-19 crisis has proved that private sector is not capable of catering to the needs of the people in the present scenario. Therefore, substantial increase in the public health expenditure seems to be only answer.
Remote rural areas of the country are still facing acute shortage of hospital facilities. People there need actual delivery of medicines and availability of healthcare professionals on the spot. Even in the urban areas, access to the healthcare facilities have remained difficult due to unavailability of the facilities on the one hand and unaffordability on the other. How much protection citizens could get much depend on how much the health sector is prioritized in the Central and the state budgets.
Centre must take note of the fact that healthcare system does not organize itself using the force of free markets. There are three reasons for that – uncertain and variable demand, information asymmetry, and hyperbolic tendencies. Therefore, the government must play a dominant role with a system design to prevent failure of the entire healthcare system which may destroy the entire economy of the country.
COVID-19 has also given another lesson, because many people have not been able to access medical facilities during the pandemic, because they were overwhelmed. Both the pandemic and other diseases killed people in thousands across the country. Union Budget 2022-23 must make provision for creation of additional infrastructure for both communicable and non-communicable diseases.
Even the Economic Survey 2020-21 had said that India still needed to improve on MMR and IMR metrics. Countries such as China, Bangladesh, Bhutan, Cambodia etc have improved much more on these metrics than India. At 3-4 per cent, the hospitalization rates in India are among the lowest in the world which it is 8-9 per cent for middle income countries and 13-17 per cent for OECD countries. The Survey had also mentioned that India ranked 179th out of 189 countries in prioritization accorded to health in its government budgets for the Union and States. (IPA)