Health financing in india


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  • Major targets set in the FRBM Act - Elimination of Fiscal Deficit to an amount equivalent of 0.3 percent of GDP or more at end of each financial year, beginning with 2004-05 - Reduction of Revenue Deficit to an amount equivalent of 0.5 percent of GDP or more at end of each financial year, beginning with 2004-05
  • Health financing in india

    1. 1. Health Financing in India
    2. 2. AgendaWhat is a health system?What does health financing provide ?What are the functions of health financing mechanisms?What are the sources of health financing in India?Comparison of health financing of India with other countriesHealth Investments in India
    3. 3. What is a health system?A health system is the sum total of all theorganizations, institutions and resources whoseprimary purpose is to improve health.A health system needs staff, funds, information,supplies, transport, communication and overallguidance and direction.A health system needs to provide services that areresponsive and financially fair, while treating peopledecently. Source:
    4. 4. What are the functions of health financing mechanisms?Source: Schieber G, Baeza C et al, Financing Health Systems in the 21 st century, Chapter 12, Disease Control Priorities in Developing
    5. 5. Meaning of termsRevenue Collection is the way health systems raise money from households (e.g. taxes, user fees, private health insurance), business (e.g. taxes, private health insurance, social health insurance), external aid (e.g. grants, loans)Pooling deals with collection and management of revenues so that members of the pool share collective health risksPurchasing refers to the mechanisms used to purchase services from public and private providers
    6. 6. Health Financing Mechanisms Providers Risk Pooling Entity Private Health InsuranceGeneral Taxation Social Health Insurance Out-of-pocket expenses Tax Collector Social Insurance Revenue Collector Taxes Employers & ConsumersAdapted from: Mossailos E; Dixon A: Funding healthcare in Europe: weighing the options, European Union: 272-300:2000
    7. 7. What are the sources of health financing in India?Source: Kataria,M., Finances of Health Care Services (BOP-WHO Workshop-1995)
    8. 8. Source of Funds % Distribution(a) Public FundsSources of Financing Healthcare in IndiaCentral Government 6.4State Government 12.6Urban Local Bodies and PRIs 1.3Total (a) 20.3(b) Private FundsHouseholds 72.0Firms 5.3NGOs 0.1Total (b) 77.4(c) External SupportGrants to Central Government 1.5Material Aid to Central Government o.1Grants to State Government 0.2To NGOs o.5Total (c) 2.3Total funds 100.0
    9. 9. Statement of funds for health care in IndiaEstimated health expenditure in India =Rs 108,732 crore or 4.8% of GDP at current market price Source: National Health Accounts, 2005
    10. 10. Health Expenditure as compared to other countries Indicator India China USA Sri Lanka Thailand Health Expenditure as % of 4.8 5.8 14.6 3.7 4.4 GDP IMR/1000 live-births 68 <30 2 8 15 Under-5 mortality/1000 live- 87 37 8 15 26 birthsHigher health expenditures does not necessarily result in better health outcomes
    11. 11. Public Expenditure on Health as % of GDP(2004 data) Source: UNDP, Human Development Report 2008
    12. 12. Government Health Expenditure(as % of GDP) Source: RBI Bulletin, Expenditure Budget, Govt of India
    13. 13. Contribution to Health Expenditure byCentral and State Government (as % of GDP) Source: RBI Bulletin, Expenditure Budget, Govt of India
    14. 14. Impact on state spending on health due toFRBM Act Total Revenue Expenditure by All States as % of GDP Source: Revenue Accounts, Various states
    15. 15. Extent of under-utilization of Health Budget(%) -: Overspent, +: Underspent Source: RBI Bulletin
    16. 16. Trends in Public Health ExpenditurePublic Expenditure on health is less than 1.2 percent of GDP (WHO recommendation- 5% GDP)In Maharashtra less than 2% of total state expenditure is on health (Standing Committee recommends around 5% of total state expenditure should be on health). In the year 2001-02 around 2.47% of total state expenditure was on health, which had decreased to 1.87% in the year 2004-05.Only 17% of BMC’s budget for health (about Rs 9.75 billion in 2006) (Mandated is 1/3rd of budget)86% of BMC’s public health budget is endowned on four major hospitals (KEM, Nair, Sion, Nair Dental)
    17. 17. Structure of Health Sector SpendingBudget Heads % AllocatedSalaries and Wages 70Drugs, medicines, supply, 12Purchase of equipment and machinery 8Maintenance of equipment, buildings, 5electricity, rent, taxes etcOther routine expenditures 5TOTAL 100%
    18. 18. Hospitalization Treatment-All India Source: NSSO 60th round
    19. 19. Non-Hospitalized treatment-All India Source: NSSO 60th round
    20. 20. Trends in health services utilization Percentage distribution of cases of hospitalized treatment in urban areas by type of hospital during 42nd, 52nd and 60th NSSO rounds 70 60 50Percentage 40 30 20 10 0 42nd 52nd 60th NSSO rounds Government Non-Government Type of Hospital NSSO 60th round NSSO 52nd round The NSSO 60 round mentions th an increase in both utilization Government Hospitals 3877 2195 of private sector utilization and hospitalization expenses in Private Hospitals 11533 5344 urban areas as compared to Any hospital 8851 3921 NSSO 52nd round
    21. 21. Health Insurance Landscape in India Total Population 1.2 bn (Oct 04) Private sector enterprise 55,000,000 Community Health Insurance 07,000,000♦ CGHS 40,000,000 ESIS 38,000,000 Private Health Insurance (Mediclaim) 17,000,000 Indian Railways 07,000,000 Uninsured 943 million Source: Industry data 2004, ♦ ILO
    22. 22. Limitations of Existing Insurance and SocialSecurity Mechanisms10% of population are covered through any form of health security0.4% of informal sector population have any sort of social security (NCEUS, 2007)ESIS, CGHS and ECHS- social security mechanisms are only for formal sectorGovernment social security mechanisms are BPL- targeted (estimates are that only 70% of population have ration cards and many of populations are not actually poor)Most newer government financing schemes are insurance-based e.g. RSBY
    23. 23. Contd...Only about 6-7% of population has some sort of coverageHealth insurance penetration is low- only 3% of population coveredOf which 50% of them are under social insurance, 23% under private health insurance and rest 17% under community health insurance
    24. 24. Impact on households due to lack of health security and low public health spending  6 - 8% of patients who fell ill did not seek care because of financial reasons1  Among those who sought care About 25% of hospitalised patients are impoverished2 Every year, an additional 3.7% of the population is impoverished because of medical causes3 Medical care is one of the 3 main causes of impoverishment in the country4 Medical inflation stands at 13% CAGR (Compared to 7% CPI and 7.3% urban income growth and 1.9 % rural income growth)1- NSSO 60th round2- World Bank, 20023- van Doorslaer,E; ODonnell O; Rannan-Eliya RP; et al. Effect of payments for health care on poverty estimates in 11 countries in Asia: ananalysis of household survey data. Lancet 2006 4- World Development Report 2004
    25. 25. Way Forward ??? High Middle Low Poor Very poor income income incomeFormal SHI + PHI SHI + PHI SHI NA NAsectorSelf PHI PHI CHI CHI NAemployedInformal PHI PHI CHI Social assistancesectorUnemployed NA NA CHI Social assistance Acknowledgements: Dr N Devadasan
    26. 26. THANK YOU