EXPENDITURE

ON HEALTH
IN INDIA
1

SOME FACTS..

Only 15% Indians have some form of health

insurance.
Hospitalized Indians spend 58% of their total
annual expenditure on health care.
Over 40% of hospitalized Indians borrow heavily
or sell assets to cover expenses.
Over 25% of hospitalized Indians fall BPL
because of hospital expenses.

Public Expenditure
It is the value of the goods and services bought by the state and its
articulations

Public Expenditure On Health

It refers to Expenditure on health care incurred
by public funds.
It includes spending on:
1. Health & Family Welfare:
(NRHM , National Health Programmes, Medical
Education)

2. AYUSH
3. AIDS Control
4. Health Research
Both recurrent and capital expenditure are included
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Determinants Of Public
Expenditure

Past choices
Bureaucracy
Political will

Current Health Scenario

1.
2.
3.

4.

5.

6.

Poor health of poor people.

High maternal and Infant mortality.
High child malnutrition, and Anemia among
women.
Dual burden of communicable and non
communicable disease.
Increasing burden of disease-HIV/AIDS &
emergence of new disease.
Increasing demand for health care services.
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Funding and Expenditure in India

Total public funding on core health: 1.04% of GDP

in 11th plan.
From perspective of the broader health sector,
which includes schemes of Ministries other than
Health aimed at improving the health status of
people, namely;
- Mid-day Meal
- ICDS
- Drinking Water and Sanitation
the total Government expenditure as a proportion
of GDP was 1.97 % of GDP in 11th Plan.
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The total expenditure on health care in India,

taking both public and private expenditure was
about 4.1 per cent of GDP in 11th Plan.

The percentage for this broader definition of health

sector related resources needs to be increased to 2.5 per
cent by the end of the Twelfth Plan.

For financing the 12th plan projections envisage

increasing total public funding, on core health from 1.04
per cent of GDP in 201112 to 1.87 per cent of GDP by
the end of the Twelfth Plan..
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Allocation and spending by MoHFW

in 11th plan
Department

11th Plan
Allocation
(Rs in
crores)

Eleventh
Plan
Release

11th Plan
Expenditure

%
Expenditure
to Release

H&FW

125923

87460

83407

95.4%

Of which under
NRHM

89478

68064

66127

97.2%

AYUSH

3988

3083

2994

97.1%

DHR

4496

1938

1870

96.5%

AIDS Control

5728

1500

1305

87.0%

Total

140135

93981

89576

95.3%

Budget Support for Department of

MoHFW in 12th Plan
Department of
MoHFW

11th Plan
Expenditure

12th Plan
Outlay

% 12th / 11th
Plan

H&FW

83407

268551

322%

AYUSH

2994

10044

335%

DHR

1870

10029

536%

AIDS Control

1305

11394

873%

Total MoHFW

89576

300018

335%

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Funding for Health in 11th Plan

Year

Centre
Core
Health

States
Core
Health

%GDP
(Core Health)
Centre

States Total

%GDP
(Broad Health)
Centre

States Total

10th Plan

47077

107046

0.29%

0.65% 0.94% 0.56%

1.18%

1.74%

11th Plan

119364

229928

0.35%

0.68% 1.04% 0.75%

1.22%

1.97%

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Inter-country Comparison Of
Public Expenditure On Health As A
% GDP
COUNTRY

Brazil

3.2

Korea

1.8

Thailand

1.2

China

0.7

India

0.9

Source: World Health Report, 2005

Strengths
1.
2.
3.
4.
5.
6.
7.

Large skilled health manpower.

Significant research capability.
Growing hospital infrastructure.
Mature pharmaceutical industry.
Democratic system.
Willingness to pay for health.
Wide network of Registered Medical
Practitioners.

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Opportunities
1.
2.

Increasing demand for health care services.

Systematic policy making and planning for
public health services.

GROUP 12

14

Challenges
1.

2.

3.

Raise resources innovatively and make the

programme sustainable.
Ensure access and quality of service to
those with no influence or voice.
To provide effective and affordable family
care to rural population

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Threats
1.
2.
3.
4.

High out of pocket expenditure.

Mounting cost of hospital care.
Health manpower training inadequacies.
Regional inequalities.

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NATIONAL
HEALTH
ACCOUNTS
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NHA constitute a systematic,

comprehensive, and
consistent monitoring of
resource flows in a countrys
health system for a given
period.
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Why NHA ?
It is a tried and tested tool for summarizing,
describing, and analyzing the financing of
national health systems.
The advantage of national health accounts is
that they not only depict the current use of
resources in the health system in detail but if
implemented on a regular basis, can also track
health expenditure trends and make financial
projection of a countrys health system
requirements.

19

 NHP-2002 emphasized the need &

recommended establishment of an
NHA system in the country by the
year 2005.
The Ministry of Health and Family
Welfare

(MOHFW)

established

an

NHA Cell in collaboration with WHO

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NHA -- INDIA

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23

Where do the resources come from ( sources ) ?

Where do the resources go ( agents ) ?
Who provides what services ( providers ) ?
What kind of services and goods do they purchase
(functions) ?
What inputs are used for providing services?
Whom do they benefit?
What is total spending on health?
Who is spending it? (poor/rich? rural/urban?
north/south?)
What is it being spent on? (PHC? hospitals? MoHFW
HQ?)
What are the sources of this expenditure?
(Government? donors?
NGOs? private?)
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International Classification for

Health Accounts ( ICHA )

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Financing Sources
Financing Sources are institutions or entities that
provide funds used in health care system by
financing agents. They are the ones who bear
expenses of financing health care in the country.
Central Government
State Government
Local Govt (ULBs & PRIs)
Households (out-of-pocket expenditure)
Employer Funds for Social Insurance
Public & Private Firms (providing employee medical
benefits)

Non Profit Institutions Serving Households

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(NPISHs/NGOs)

Financing Agents
Financing agents are institutions or entities that
channel funds provided by financing sources and use
those funds to pay for or purchase the activities given
in the health accounts boundary.

Ministry of Health and Family Welfare

Other Central Government Ministries
State Department of Health and Family Welfare
Other State Departments
Local Governments/ Local Bodies
Social Security Funds
CGHS/ Medical Benefits
ESIS
State Government Employees Benefit Scheme
Private Insurance providers (Public/Private)
NGOs
Public/Private Firms
Households

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Providers
Providers are entities that receive money in exchange for or in
anticipation of producing activities inside the health accounts
boundary.
Public Hospitals
Dispensaries
Family Welfare Centres
Public Health Labs, Blood Banks
Provider of Medical Goods
Provision of Public Health and RCH Programmes
Public Health & RCH Training
Medical Education Research
General Health Administration and Insurance
NGO Provider
Private Provider of Health Services
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Functions
Functions are the types of goods and services and
activities provided within the health accounts
boundary.
Curative Care

Rehabilitative care
Services of long term-nursing care
Ancillary services to health care
Medical goods dispensed to outpatients
RCH and Family Welfare
Control of Communicable Diseases
Control of Non-Communicable Diseases
Other Public Health Activities
Health Administration and Insurance
Nutrition Programme by State Department of Health
Medical Education & Training of Health Personnel
Research & Development
Food Adulteration
Capital Expenditure

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Limitations of NHA

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THANK
YOU

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