Wake-up call for India’s healthcare infrastructure

The pandemic has shown that India’s healthcare system is lacking on multiple fronts and calls for a rework by all stakeholders. Government expenditure on health, demand-supply mismatch, and chronic shortages are just some of the problems. Mint explains the gaps:

How much does India spend on healthcare?

In 2020-21, India spent 1.8% of its gross domestic product (GDP) on healthcare. With ‘health and well-being’ one of the six pillars of the Union Budget 2021-22, the government has committed approximately 2.5-3% of GDP now. Data shows that India has 1.4 beds per 1,000 people, 1 doctor per 1,445 people, and 1.7 nurses per 1,000 people. According to the World Health Organization (WHO), India ranks 184 out of 191 countries in health spending. The US spends over 16% of its total GDP on healthcare, while Japan, Canada, Germany etc. spend over 10% of their GDP on healthcare.

How do states rank on the health index?

The Health Index for States developed by Niti Aayog in consultation with the health ministry and the World Bank has rankings for large states, smaller states and Union territories. It is based on 23 health parameters ranging from mortality rate and sex ratio to functioning cardiac care units. In 2019, Kerala was the top performer followed by Andhra Pradesh and Maharashtra. The best incremental change was seen in Haryana, Rajasthan, Jharkhand, Andhra Pradesh and Assam. The index results indicated that states even with a lower economic output are performing better on health and well-being.

How have facilities coped with the pandemic?

Badly. The capacity of the healthcare system has been stretched to its limits with critical shortages of hospital beds, oxygen concentrators, life-saving drugs, medical supplies, disease surveillance etc. With urban India struggling to counter the onslaught of the second wave of covid-19, rural India’s threadbare healthcare system stands even more stressed.

Does poor healthcare impact the economy?

At a micro level, increased expenditure adversely impacts savings and consumption levels. Reduced consumption leads to reduced demand, disincentivising producers to invest more in capital formation. In case of firms, poor health conditions impact physical and mental ability, worker turnover, and attendance, leading to lower productivity. At a macro level, lower economic efficiency results in lower production relative to inputs employed, leading to lower economic growth and reduced income generation.

What is needed to improve healthcare?

India is in desperate need of an all-encompassing public healthcare system. The need of the hour is to have a regulator who can work with states and ensure that the focus shifts to affordable health-care, availability of more health-care professionals, well-equipped facilities, and disease prevention instead of disease management. Inequity among states in terms of facilities needs to be minimized. The Centre needs to aim for 100% health insurance coverage.

Jagadish Shettigar and Pooja Misra are faculty members at BIMTECH.