Why India?s healthcare system continues to lag behind

By Moin Qazi

Moin Qazi is the author of Village Diary of a Heretic Banker. He has spent more than three decades in the development sector.

India’s economy is soaring but its healthcare system remains an Achilles’ heel. For millions of people, the high cost of treating illness continues to undermine economic progress. This is largely on account falling budgetary support for the healthcare system by government. India now ranks close to the bottom of the pile in international rankings on most health indices.

Poor numbers by international standards

With an investment of 1.3% of GDP in health services— which has remained at the same level for a decade—India ranked 187th out of 194 countries according to the World Health Organization (WHO), while accounting for a full 20% of the global healthcare burden. Comparable rates are 1.5% in Sri Lanka, 2.7% in China, and 3% in Thailand. In order to remedy this the National Health Policy 2017 has proposed an increase in public spending on health care from the current dismal rate of 1% to a meagre 2.5% of GDP by 2020. This would still leave India well below the world average of 5.99% of GDP.

Compared to its spending on health, India spends around 2.4% of its GDP on defence. Global evidence shows that, unless a country spends at least 5-6% of its GDP on health with most of that coming from public funds, basic healthcare needs are unlikely to be met.

Here is a snapshot of India’s current health system:

• 30% of Indians do not have access to primary healthcare facilities.
• About 39 million Indians fall below the poverty line each year because of healthcare expenses.
• Around 30% of people in rural India do not visit hospitals due to fear of the expenses.
• 47% of healthcare needs in rural India and 31% of the need in urban areas are financed by loans or the one-off sale of assets
• About 70% of Indians spend all their income on healthcare and drugs.
• Out-of-pocket spending on healthcare in India—which makes up 69% of the total expenditure on health—is among the highest in the world, and is much more than the rates in Thailand (25%), China (44%), and Sri Lanka (55%).

A particular challenge for the rural poor

The costs related to illness can shave-off most of the hard-earned savings in low-income communities. The Indian Ministry of Health has found that a quarter of all people hospitalised were pushed into poverty by their hospital costs, and this does not include the cost of missed work.

Universal healthcare remains a distant reality in India because the sector remains very low on the government’s list of priorities. In particular, while health facilities in India’s metros now compete with the world’s best, the scenario beyond the urban conglomerates is quite discouraging.

An inadequate doctor-patient ratio

Nearly 30,000 doctors, 20,000 dentists and 45,000 nurses graduate from medical colleges across India every year. However, the doctor-to-patient ratio in India is only six for every 10,000 people. This is far below the rate in Australia (1 for every 249), the UK (5 for every 1,665) and the US (9 for every 548). The global ratio stands at 15 doctors for every 10,000 people.

The distribution of doctors is also uneven across the country, with a low ratio in states like Chhattisgarh and Jharkhand—just two doctors for every 1, 00,000 people. And there are only six hospital beds and two surgeons per lakh of population. There is one government doctor for every 10,189 people, one government hospital bed for every 2,046 people and one state-run hospital for every 90,343 people. In comparison to these dismal numbers, the US has 24.5 doctors for every 10,000 people and one hospital bed for every 345 citizens.

Overal public spending remains low

India has a laggardly record in updating its healthcare coverage. In per capita terms, adjusted for purchasing power, India’s public expenditure on health is $43 a year, compared to $85 in Sri Lanka, $240 in China, and $265 in Thailand. European nations spend 10 times and the US 20 times. According to the Insurance Regulatory and Development Authority (IRDA), the Indian government’s contribution to health insurance stands at roughly 32%, as opposed to 83.5% in the UK. India’s high rate of out-of-pocket expenses for health in stems from the fact that 76% of Indians do not have any health insurance.

The recently released National Health Accounts (NHA) for 2014-15 show that the average amount spent by the government for each citizen per year was just Rs 1,108. This is against nearly Rs 6,300 spent on each central government employee. According to the NHA, India’s total health expenditure in 2014-15 worked out to Rs 3,826 per person. Of this, people had to spend Rs 2,394 (63%) out of their own pockets. In 2014-15, the Union government’s expenditure on the National Health Mission was Rs 20,199 crore. Spread this cash injection over a population of roughly 1.25 billion and it comes out to a paltry Rs 162 per head.

Health centres have not solved the problem

The apathy of the government is reflected in a rather poor prognosis for the health system. Primary health centres (PHCs) in villages are supposed to screen and refer medical cases to hospitals in local districts or on to state-level specialist hospitals. However, PHCs are not present in many villages (there are about 1 for every 20 villages), and where present are acutely undermanned. Moreover, as many as 18% of  PHCs are entirely without doctors. The only redeeming feature of the system is the committed cadre of Auxiliary Nurse Midwifes (ANMs) who work at PHCs, and the accredited social health activists (ASHAs).

It is true that Indian healthcare facilities have grown significantly in terms of numbers and the expertise of the health professionals, but this growth has largely been confined to the private sector. It is the government’s failure to deliver quality care that has led to the rapid expansion of private hospitals, which today account for 93% of all hospitals (up from 8% in 1947), 64% of all beds, and 80%-85% of all doctors. However, affordability in Tier 3 cities and rural areas is a critical limiting factor for the further expansion of the private health sector.

Some solutions are already available

Nearly 75% of dispensaries, 60% of hospitals and 80% of doctors are located in urban centres and most doctors cater to only that third of the population that lives in urban areas. Currently, there are around 734 district hospitals across the country which provide secondary healthcare facilities to people outside the metro areas. In addition, there are around 300 other hospitals, such as women’s hospitals at the district level. These are powerful nodes in India’s healthcare network and can be revitalised in order to boost the health infrastructure outside of the big cities.

India needs to reform the public healthcare sector’s governance and management systems. The approach to service delivery has to be aimed at providing a functional referral link between urban and rural services in order to establish a ‘continuum of care’. For reforms to be successful the government needs to establish hard targets and to hold those tasked with the administration of the system accountable. The direction of travel is right but the pace of the journey must be accelerated.

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