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What do the Budget 2019 allocations mean for healthcare? Dr. Soham Bhaduri

M3 India Newsdesk Feb 11, 2019

Dr. Soham Bhaduri, a physician and healthcare commentator, analyses and comments on the Budget 2019's various allocations to healthcare programs.

The union (interim) budget presented by Finance Minister Piyush Goyal on February 1, 2019 allocated Rs. 61,398 crores to health, an increase of Rs. 8598 crores above the previous year (Rs. 52,800 crores in 2018-19, budget estimate). While this looks like a considerable increase, it is still only 2.2% of the total government budget (same as last year).

Health spending in our country has shown a perennial aversion to substantial increases. It peaked in the mid-1980s at 1.6% of GDP, only to be soon followed by a drastic cut in the 1992-93 budget, which could never be reversed. Since then, our government health spending has consistently hovered around the sticky mark of 1% of GDP. While the national health policy 2017 envisioned to raise it to 2.5% of GDP by 2025, the present trend is highly unlikely to lead to this end.

Pradhan Mantri Jan Aarogya Yojana (PMJAY)

The allocation for PMJAY – which aims to provide insurance coverage of up to Rs. 5 lakh per family per year to 10 crore poor families for hospitalisation expenses– has been boosted by Rs. 4000 crores. Even though this is still Rs. 1000 crores short of the demand placed by the centre, it bespeaks the centre’s commitment to expand access to secondary and tertiary care.

Recently, the government released a set of SOPs for encouraging the private sector to open hospitals in Tier 2 and Tier 3 cities, which is expected to take medical care and the benefits of the PMJAY closer to the rural poor.

The NITI Aayog’s draft guidelines on public private partnership (PPP) for non-communicable diseases offers parts of district hospitals on 30 year leases to the private sector to set up 50-100 bedded hospitals and provide care at PMJAY rates. However, that this emphasis comes at the cost of other essential initiatives is the cause for worry.

National Health Mission (NHM)

The allocation for the National Health Mission (NHM), our flagship program in primary care, has increased from Rs. 30,683 crores in 2018-19 to Rs. 31,745 crores this year. However, the trend over the last many years has been hardly promising – the NHM budget last year had suffered a 2% decrease in allocation from the preceding year (2017-18), and with the minor increase this year, it only approaches the actual spending on the program in 2017-18, which was Rs. 31,510 crores.

Health and Wellness Centres (H&W)

The transformed sub-centres envisaged under Ayushman Bharat Mission to provide comprehensive primary healthcare to the population, have also seen only a marginal increase in allocation this year. This indicates that strengthening of primary healthcare is being inadequately emphasized on in the pursuit of extending hospitalisation insurance to an incrementally larger population. It also flies in the face of the national health policy 2017 which aims to commit 70% or more resources for primary healthcare.

As the announcement of the Ayushman Bharat Mission was made in the 2018-19 budget, concerns regarding its fiscal sustainability were raised by many experts. In a piece written in The Telegraph newspaper last year, I myself had argued that with the incremental increase in spending that this program of giant proportions shall demand in the upcoming years, primary care may get side-lined.

This could leave our H&W centres and primary health centres to being little more than just referral points to hospitals under the PMJAY insurance scheme. Given that the main objective of the mission is to reduce the burden of out-of-pocket (OOP) spending on health, and that the greater burden of OOP is comprised of outpatient costs, an exclusive emphasis on hospitalisation coverage could be highly counterproductive. We should remember that our total spending on the Ayushman Bharat Mission (approx. 12000 crores) is merely 4% of the total OOP spending on health in the country.

There is an urgent need for subsequent budgets to generously increase spending on primary care along with allocating higher sums to health. Much of the headway made in the recent years with regards to maternal and child mortality and communicable diseases may be undermined if the current trend continues – not to mention that the success of the existing schemes which are being pursued enthusiastically relies on a well-functioning primary healthcare system.


Disclaimer- The views and opinions expressed in this article are those of the author's and do not necessarily reflect the official policy or position of M3 India.

The Writer is a medical doctor, a healthcare commentator, and Editor of The Indian Practitioner, a peer reviewed monthly medical journal. Email: soham.bhaduri@gmail.com

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