Enhanced govt spending on healthcare to cut out-of-pocket spending: Economic Survey

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New Delhi, Jan 29 (PTI) An increase in government spending on the healthcare sector - from the current 1 per cent to 2.5-3 per cent of GDP - as envisaged in the National Health Policy 2017 could reduce out-of-pocket expenditures, as per the Economic Survey 2020-21.

The rise in public spending can lead to a reduction in expenditures from 65 per cent to 30 per cent of overall healthcare spend, it noted.

The Economic Survey said that for the country to effectively respond to future pandemics, the country's health infrastructure needs to be agile.

Given its potential to provide healthcare access in remote areas, telemedicine needs to be harnessed to the fullest by especially investing in internet connectivity and health infrastructure, it added.

The annual document also noted that focus on the National Health Mission (NHM), which has played a critical role in mitigating inequity as the access of the poorest to pre-natal and post-natal care, should continue in conjunction with Ayushman Bharat.

Besides, as the bulk of the healthcare in the country is provided by the private sector, it is critical for policymakers to design policies that mitigate information asymmetry in healthcare, which creates market failures and thereby render unregulated private healthcare sub-optimal, the survey said.

A sectoral regulator to undertake regulation and supervision of the healthcare sector must be considered, given the market failures stemming from information asymmetry, it added.

The WHO also highlights the growing importance of the same, the document said.

The mitigation of information asymmetry would also help lower insurance premiums, enable the offering of better products and help increase the insurance penetration in the country, it noted.

While the share of public institutions has increased both in hospital and outpatient cares, the private sector dominates in total healthcare provision in India.

Around 74 per cent of outpatient care and 65 per cent of hospitalisation care is provided through the private sector in urban India.

The country must take steps to improve healthcare accessibility and affordability, the document said.

Emphasising on the steps to make the system agile towards pandemics, the Economic Survey noted that every hospital may be equipped so that at least one ward in the hospital can be quickly modified to respond to a national health emergency while caring for the normal diseases in usual times.

Research in building such health infrastructure can guide how to build such flexible wards, it added.

Following the COVID-19 pandemic, a key portfolio decision that healthcare policy must make is about the relative importance placed on communicable versus non-communicable diseases, the policy document said.

As pandemics represent rare events, healthcare policy can become a victim of 'saliency bias', which involves over-weighting recent phenomena, it added.

Around 71 per cent of the global deaths and about 65 per cent of deaths in India are caused by non-communicable diseases.

Preventing communicable diseases requires a focus on better sanitation and drinking water, which the Swachh Bharat and Har Ghar Jal Abhiyan campaigns are focusing on, it said.

Despite improvements in healthcare access and quality, India continues to underperform in comparison to other low and lower middle income (LMIC) countries.

On quality and access to healthcare, the country was ranked 145th out of 180 countries (Global Burden of Disease Study 2016). Only a few sub-Saharan countries, some pacific islands, Nepal and Pakistan were ranked below India. PTI MSS BAL