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Economic Survey bats for increase in public spending on healthcare to reduce out-of-pocket expenditure

India has one of the highest levels of out-of-pocket expenditure (OOPE) in the world, contributing directly to the high incidence of catastrophic expenditures and poverty.

January 30, 2021 / 09:28 AM IST
Representative Image

Representative Image

The Economic Survey 2020-21 has batted for a long-term outlook on the healthcare sector, stating that an increase in public spending to 2.5-3 percent can reduce out-of-pocket expenditure (OOPE) to 30 percent from the current level of 65 percent.

The survey indicated that states that have higher per capita spending have lower out-of-pocket expenditure and hence richer states should increase healthcare spending as a percent of GDP to 2.5-3 percent. “An increase in public spend from 1 percent to 2.5-3 percent of GDP can decrease the OOPE from 65 per cent to 30 per cent of overall healthcare spend,” the survey said. OOPEs are those payments borne directly by a patient where insurance does not cover the full cost of the health good or service. It noted that the richer states are spending a lower proportion of their GSDP on healthcare at present. India has one of the highest levels of OOPE in the world, contributing directly to the high incidence of catastrophic expenditures and poverty.

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The report indicated that rather than looking at a pandemic-based health strategy, India should look for a long-term policy on the sector, with an agile health system. It suggested that every hospital may dedicate at least one ward that can be quickly modified to respond to a national health emergency while caring for the normal diseases in usual times.