Union Health Budget-2019
Rhetoric and Reality

Union Health Minister Dr. Harsh Vardhan stated that the health budget for the financial year 2019-20 “reflects the importance accorded to the health sector in the country”.

The current Budget for health has witnessed an increase in BE by 18.67% in the total outlay (from Rs. 52,800 crore in 2018-19 to Rs. 62,659.12 crore in 2019-20). The government’s flagship programme like Ayushmman Bharat has primarily consumed a lion's share of this additional allocation of Rs. 9,859.12 crore which is an increase of 154.87% (Rs. 4,956 crore) in BE showcasing two important verticals: (i) Health and Wellness Centres (HWCs) and, (ii) Pradhan Mantri Jan Arogya Yojana (PMJAY).

By simply going through the above numbers, the Health Budget 2019-20 apparently gives an impression of being propitious. However, a much deeper study is necessary to understand how much this Health Budget is poised for, at least, in recognizing the challenges of India’s healthcare sector even if they are not immediately redressed.

Health Financing in India

Health financing systems are critical for reaching universal health coverage. Certain key health financing areas may be considered as determinant to interpret health outcomes in relation to the expenditure and, more importantly, to perceive whether people can afford to use health services as and when they need.

Per capita public expenditure on health in India, in nominal terms, has gone up from Rs. 621 in 2009-10 to Rs. 1,112 in 2015-16 means the country spent roughly Rs. 3.04 per capita per day towards public health expenditure. During 2015-16, India spent only 1.02% of its gross domestic product (GDP) on public healthcare and, if we see the trends in public health expenditure, there was no significant change since 2009-10 until 2017-18. (See Table-1)

Table-1

Trends in Public Expenditure on Health

(Both Centre and states/UTs put together)

Year	Public Expenditure on Health (in Rs. cr)	Population (in cr)	Public Expenditure on Health as Percentage of GDP (%)
2009-10	72536	117	1.12
2010-11	83101	118	1.07
2011-12	96221	120	1.10
2012-13	108236	122	1.09
2013-14	112270	123	1.00
2014-15	121600.23	125	0.98
2015-16	140054.55	126	1.02
2016-17 (RE)	178875.63	128	1.17
2017-18 (BE)	21379.58	129	1.28

Source: National Health Profile-2018

A close look at the health sector financing by Centre and states/UTs in India would reveal the fact that the Centre spends very little in compared to the states and Union Territories. (See Table-2)

Table-2

Trends in Centre-state share (%) in Total Public Expenditure on Health

Year	Centre’s Expenditure on Health (%)	States’ Expenditure on Health (%)
2009-10	36	64
2010-11	35	65
2011-12	35	65
2012-13	33	67
2013-14	34	66
2014-15	33	67
2015-16	31	69
2016-17 (RE)	29	71
2017-18 (BE)	37	63

Source: National Health Profile-2018

Public expenditure on health as percentage of GDP among South East Asia Region Countries, excluding Democratic People’s Republic of Korea (due to data being unavailable), India ranked at second from the bottom in 2015, according to the Global Health Expenditure Database, World Health Organization.

India spent 1.15% of its GDP towards public health during FY 2018-19 which was below than some of the low-income countries which spend 1.4% of their GDP on health. Accepting it as a challenge, in December, 2018, Prime Minister Narendra Modi declared that India would increase its public health spending to 2.5 per cent of its GDP by 2025. (Business Standard) However, the country is set to spend just around 1.24% of its GDP during the current financial year and is far away from its own goal.

Now, let us examine the head-wise distribution of public expenditure on health to understand how well-thought are they.

National Health Mission

The allocation for the National Health Mission (NHM) for 2019-20 was raised to by a meager Rs. 2,865.39 crore from the last budget and the corpus made available in this head is Rs. 32,995 crore, an increase by 7.5%, which can barely cover inflation. The Annual Report of National Health Mission (2015-16) explains: “The main programmatic components include Health system strengthening in rural and urban areas, Reproductive Maternal-Neonatal-Child and Adolescent Health (RMNCH+A) and Communicable and NonCommunicable Diseases. The NHM envisages achievement of universal access to equitable, affordable & quality healthcare services that are accountable and responsive to people’s needs.” Hence, the NHM should cover all the major aspects of health related issues.

NHM seeks to ensure reduction in Maternal Mortality Ratio (MMR) to 100 per 100000 live births. According the NITI Aayog, MMR during 2014-16 remained as high as 130 per 100000 live births pushing India far behind from its own objective as well as the Millennium Development Goal (MDG). NHM envisages reduction in Infant Mortality Rate (IMR) to 25 per 1000 live births, whereas, NITI Aayog data clarifies that India’s IMR dropped from 37 in 2015 to 34 in 2016 per 1000 live births which are well below ten percentage mark. Mortality indicators in case of neo-natal, post-natal, peri-natal including still birth in India, though marginally declining, yet alarmingly on higher side. (See Table-3)

Table-3

Mortality Indicators in India

	2010	2011	2012	2013	2014	2015	2016
Neo-natal mortality rate	33	31	29	28	26	25	24
Post-natal mortality rate	14	14	13	13	13	12	11
Peri-natal mortality rate	32	30	28	26	24	23	23
Still birth rate	7	6	5	4	4	4	4

Source: SRS Statistical Report, Registrar General of India

Note: 2010 excludes Jammu & Kashmir, Mizoram, Nagaland (Rural)

Another key target of NHM is prevention and reduction of anemia in women aged 15–49 years. According to the National Family Health Survey 2015-16 (NFHS-4), 53.1% non-pregnant women (haemoglobin <12.0g/dl) and 50.3% of pregnant women (haemoglobin <11.0g/dl) of the same age group in India were suffering from anaemia. Moreover, 58.4% children aged between 6-59 months were also anaemic (haemoglobin <11.0g/dl).

NHM is also aimed for prevention and reduction in morbidity and mortality from various communicable diseases. In India, as reported by National Health Profile (NHP-2018), there are communicable diseases with high case fatality rate (2% and above). Communicable diseases like Japanese Encephalitis (12%), Acute Encephalitis Syndrome (8%), Meningococcal Meningitis (6%), H1N1 (6%), Encephalitis (5%), Tetanus neonatal (3%), Diphtheria (3%), Tetanus other than neonatal (2%) and Viral Meningitis (2%) are having high fatality rate. Further, according to the report from the Directorate of National Vector Borne Disease Control Programme; under the Ministry of Health & Family Welfare (MOHFW), the cases and deaths due to dengue is causing enough concern. (See Table-4)

Table-4

Cases and Deaths due to Dengue in India

	2013	2014	2015	2016	2017
Cases Reported	75808	40571	99913	129166	157996
No. of Deaths	193	137	220	245	253

Source: Directorate of National Vector Borne Disease Control Programme

Treating tuberculosis (TB) is an important programmatic component of NHM with an aim to reduce annual incidence and mortality by half. The Government of India announced its plan to eliminate tuberculosis (TB) by 2025 during the Union Budget address in 2017. Though the incidence of TB has reduced from 289 in 2000 to 217 in 2015 for every100000 population, and the mortality due to TB has reduced from 56 in 2000 to 36 in 2015 per 100000 populations, India is still far away from its objective in eradicating Tuberculosis. Considering that India accounts for 27% of the world's 10.4 million new TB cases, 29% of the 1.8 million TB deaths globally and 16% of the estimated 480, 000 new cases of multidrug-resistant TB, the Union Health Budget for 2019-20 makes little or no efforts to contemplate the government’s previous declaration.

With such prevailing health related issues, an additional budgetary allocation of Rs. 2,865.39 during current financial year seems insufficient to meet the challenges. Besides, there is a reduced budgetary allocation for the National Mental Health Programme, a decline from Rs. 50 crore to Rs. 40 crore while the budgetary allocation is reduced by Rs. 120 crore for the National Programme for prevention and control of Cancer, Diabetes, Cardio-vascular Disease (CVD) and Stroke. The NHP-2018 categorically noted that there has been an accelerated rise in the prevalence of, chronic non-communicable diseases (NCDs) such as diabetes, CVD, chronic obstructive pulmonary disease (COPD), cancers, mental health disorders and injuries; but the budgetary allocations to tackle the situation is on decline. The tertiary care programmes, which are supposed to have advanced medical investigation and treatment facilities in a tertiary referral hospital, have also witnessed a Rs. 200 crore dip in this Health Budget.

Health Infrastructure

Under the National Urban Health Mission and National Rural Health Mission, Rs. 249.96 crore and Rs. 1,349.97 crore has been set aside respectively to transform nearly 1.5 lakh sub-centres and primary health centres into Ayushman Bharat health and wellness centres by 2022 which will be equipped for treating blood pressure, diabetes, cancer, old age-related illness etc.

As on 31 March 2017, there were 156,231 sub-centres (SCs); 25,650 Primary Health Centres (PHCs) and 5,624 Community Health Centres (CHCs) in India. (NHP-2018) It has been reported that only 11% SCs, 13% PHCs and 16% CHCs meet the Indian Public Health Standards. To transform such penurious setup into advanced health and wellness centres with per capita assistance of just Rs. 90,000 might look too ambitious. Moreover, the budget is silent on the infrastructural issues of the public hospitals in rural and urban areas which are always over crowded with patients since all SCs, PHCs and CHCs finally flow into these hospitals. (See Table-5)

Table-5

Number of Government Hospitals and beds in Rural and Urban India

(Provisional as on 01/01/2017)

Rural Hospitals (Govt.) No.          Beds	Urban Hospitals (Govt.) No.          Beds	Average Population Served Per Govt. Hospital	Average Population Served Per Govt. Hospital Beds
19810      279588	3772       431173	55591	1844

Source: Directorate General of State Health Services

The Rural Health Statistics, available as on March 2018, suggests that out of all required specialists’ posts at CHCs only 61% have been sanctioned and, of those sanctioned, over 70% of the posts are lying vacant.

According to the Central Drugs Standard Control Organisation (CDSCO) data as on June 2017, total number of blood banks in India was 2,903 which mean, on an average, one blood bank has to cater to roughly 4.5 lakh people. Ironically, the Health Budget for FY 2019-20 remained silent on the issue.

Health Human Resources

Human Resources for Health is the most important building block of public health. [NHP 2018] To provide effective health care services, there is a need for adequate number of healthcare professionals and their appropriate deployment at different levels of health care set-up. In India, information on human resources in the health sector is incomplete and unreliable. More and more authentic studies are needed in evaluating the actual numbers.

For the year 2017, the number of registered allopathic doctors possessing recognized medical qualifications (under MCI Act) and registered with state medical council was 17,982 and the average population served per government allopathic doctor was 11,039. The population to doctor ratio is 25 times lower than the recommendation of the World Health Organization. Besides, the number of dental surgeons and AYUSH practitioners, as on 31 December 2017, was 251,207 and 773,668 respectively. Earlier, it was decided that the AYUSH practitioners would be trained in Allopathic medicines to benefit the vast population. In this budget, provisions have been kept for an amount of Rs. 3,000 crore for creating tertiary healthcare capacity in medical education, research and clinical care, particularly, in the underserved areas of the country. Although it is not very clear whether the said corpus would be spent to train the AYUSH practitioners on modern medicine or to facilitate the allopathic students, in either way, the amount is grossly insufficient.

Rs. 64 crore has been earmarked for upgrading and strengthening nursing services. It is, however, not very clear whether the amount would be spent on the existing nursing professionals or to train the nursing students. As on 31 December 2016, India had 841,279 Auxiliary Nurse Midwives (ANM), 1,980,536 Registered Nurses & Registered Midwives (RN & RM), 56,367 Lady Health Visitors (LHV) which often found to be insufficient for India’s population but there is hardly any ray of hope for the future in absence of both appropriate planning and funding. Moreover, the budget has also suggested that Rs. 5 crore would be spent for upgrading pharmacy schools and colleges. There are estimated 1,412 pharmacy colleges in India. The existing number of Pharmacists as on 13 November 2017 was 907,132 which were nowhere nearer to fulfill the country’s requirement. Thus, the budgetary allocations are paltry in case of bringing out more number of qualified pharmacists in India.

Health Insurance

This year’s health budget granted Rs. 6,400 crore for Ayushman Bharat-Pradhan Mantri Jan Arogya Yojna (AB-PMJAY), which is an increase by whooping 166% for this public funded health insurance scheme compared to last year. This flagship scheme of the centre aims at providing annual health cover of up to Rs. 5 lakh per family for secondary and tertiary care hospitalization to over 10.74 crore vulnerable families and  the number of beneficiaries would approximately be 50 crore population. AB-PMJAY has been in place to reduce the out-of-pocket expenditure (OoPE) in case of dreadful health episodes.

Public financing is essential for countries to make sustainable progress towards universal health coverage (UHC). These funds need to be used efficiently and directed to priority populations and services to ensure equitable access to quality health services and financial protection for all. In case of secondary and tertiary care hospitalization, AB-PMJAY is undoubtedly an ambitious step towards UHC. But, in the present context of India’s healthcare system, such scheme may not benefit the largest possible population as intended.

Firstly, an allotment of Rs. 6,400 crore to meet hospitalization expenses would carry little meaning for a population of 50 crore which accounts for just Rs. 128 per person. As per the publication titled “Health in India – NSS 71^st Round” (January-June 2014) brought out by the National Sample Survey Organisation (NSSO), the average total medical and other related non-medical expenditure per hospitalization in rural and urban areas are Rs.16,956/- and Rs.26,455/- respectively.

Secondly, India’s secondary, tertiary and quaternary healthcare institutions predominantly belong to the private sector where cost of treatment is as high as four times as the public sector. Moreover, 72% of the rural and 79% of the urban population in India is being treated in private facilities. Only 28% people in rural and 21% in urban areas fetch public hospitals. Such scenario has encouraged the private sector players for making large investments in India's hospital industry and the sector is poised to grow from US$ 100 billion in 2015 to US$ 280 billion by 2020. (IBEF 2017) A government funded AB-PMJAY might only be beneficial for the private players of the health sector.

Thirdly, in an almost unregulated market in India, the private insurance players may find the government’s flagship scheme as a boon to their business. In September 2018, with the launch of National Health Protection Scheme under Ayushman Bharat, it was anticipated that the penetration of health insurance in India would increase from 34% to 50%. According to the updated list published in the website of the Insurance Regulatory and Development Authority of India on 10 July 2019, there were 34 non-life insurers in India out of which only 4 belonged to the public sector. (IRDA 2019) In 2017-18, general and health insurance companies collected Rs. 37,029 crore as health insurance premium, registering a growth of 21.8% over 2016-17. But, the market share of four public sector general insurers declined from 63% in 2016-17 to 58% in 2017-18.

Experience from Japan

In the given scenario, government of India may consider few examples in overhauling its health policy. In Japan, the government regulates and controls nearly all aspects of the health system, including the health insurance. In 2016, according to the Ministry of Health, Labour and Welfare (MHLW), Japan had a total of 178,911 active medical facilities, including 8,442 hospitals, 101,529 general clinics and 68,940 dental clinics. The government sets the nationally uniform fee schedule for insurance reimbursement while subsidizes and supervises local governments, insurers and health-care providers. The relationship between purchasers (health insurers) and providers (hospitals, clinics and pharmacies) in Japan is contractual in nature, and insures are prohibited from making direct contract with purchasers. Though most of the services are covered by national insurance, some services, especially for non-diseases, cosmetic and luxury purposes are not covered by health insurance and patients have to pay the full amount. Japanese hospitals and clinics are predominantly privately owned. In 2016, of the 8,442 hospitals, privately owned hospitals numbered 6,849 (81.1%) but all of them are for non-profit and follow the fee schedule as determined by MHLW. 

How Canada acts

Despite its several shortcomings, the healthcare system of Canada could also be another good example for India. Canada’s universal, publicly funded health-care system “Medicare” is a model of UHC. The Canada Health Act outlines the terms and conditions such as portability, universality, accessibility, comprehensiveness, and public administration in order to access federal funding for health care. Universality stipulates that access to healthcare must be on uniform terms and conditions and, individuals do not have preferential access based on the ability to pay privately. Accessibility means that no user fees are charged for publicly insured services. When a Canadian visits a doctor or is cared for in any department of a hospital, there is no payment or deductible. Portability allows insured residents to keep their coverage when travelling or moving within Canada. Medicare is a single-payer layer of financing that is highly decentralized in terms of service delivery and its administrative overhead is less than 2% because of the simplicity of the scheme.

Health insurance in Australia

The federal government of Australia also funds Medicare, a universal public health insurance program providing free or subsidized access to care for Australian citizens, residents with a permanent visa and to citizens of certain other countries through formal agreements which include hospital care, medical services, pharmaceuticals, etc. to name a few. The government mainly provides funding through the Medicare Benefits Scheme (MBS) and the Pharmaceutical Benefits Scheme (PBS). One unique aspect of Australia’s healthcare system is: OoPE on pharmaceuticals are capped. There are no deductibles or OoPE for patients receiving public hospital services. General practitioner (GP) visits are subsidized at 100% of the MBS fee, and specialist visits at 85%. GPs and specialists can choose whether to charge above the MBS fee. About 83% of GP visits were provided without charge to the patient in 2014-15.

Conclusion

Even after seventy years of its independence, India faces many challenges in healthcare sector and some of them are very basic. Across 8 states of India 18,258 habitations suffer due to excess presence of arsenic in drinking water. As on April 2017, the number of fluoride affected rural habitations in India were 13,492 with excess fluoride and yet to be provided with safe drinking water. According to a Lancet study, India ranks 145^th out of 195 countries in terms of quality and accessibility of healthcare. “Although India’s improvements on the Healthcare Access and Quality (HAQ Index) hastened from 2000 to 2016, the gap between the country’s highest and lowest scores widened (23.4 point difference in 1990 and 30.8 point difference in 2016)”, the study concluded.

However, by the end of FY 2019-20, India is all set to become US$ 3 trillion economy and, therefore, the country need to do a lot in improving its healthcare services particularly through public funding. If we take out the budgetary allocation of AB-PMJAY, the increase in total health outlay for 2019-20comes to only a modest 8% which won’t be sufficient even to square up the inflation. BJP’s election manifesto had a promise to set up 150,000 HWCs by 2022, to increase undergraduate seats by 18,000 and PG seats by 20,000 within five years and double the number of doctors and specialists that the country has by 2024 besides many other commitments in the healthcare sector like complete eradication of tuberculosis by 2025 etc.

Indians, thus, had high hopes that the government at the centre, led by Narendra Modi for the second consecutive term, would pay ample attention towards the much ‘promised’ healthcare amenities of the country during its first Budget. It was expected that the issues like access to medical facilities and inexpensive treatment would be taken care of. Globally, India is one of the lowest investor in health sector with its public spending on health well below 2%. But, the country spends five times more on defense. It will be difficult for India to meet several challenges existing in healthcare sector and achieve its objectives of UHC at the current pace of public funding. No doubt, the health outlay has been increased in the current fiscal. But the present situation demands much more. In short, the Health Budget 2019 does not accord enough importance to the country’s health sector. An urgent task for the Indian society would be to constantly remind the ruling dispensation of its electoral promises; for they have been neglected long enough.

@pradipsinterpretations