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Little co-relation between health spend and Covid-related results: Ind-Ra

While health infrastructure, such as hospital beds and availability of doctors, plays a crucial in fighting the pandemic, the final outcome depends on state-level political leadership to leverage existing and stepped-up health expenditure, a report by India Ratings and Research has said.

The lack of administrative initiative explains why there have been mixed results and little one-to-one correspondence between health expenditure, infrastructure and Covid-19 related outcomes, the report said.

“Hospital beds and doctors are essential to take care of the Covid-19 case load, but to detect and prevent the spread of the pandemic, mass-scale testing and tracing is required, which is not possible without active, elaborate and sustained administrative support and additional health care expenditure undertaken by state governments.”

The report shows, for instance, that Delhi, while spending the highest portion of its revenue expenditure on health (16 per cent) has seen the maximum caseload (292) and deaths (4.7) per 10,000 population.

Also Read: Indian banks’ capital to slip over 2 years without fresh infusion: Moody’s

According to the National Health Accounts FY17 of the Union Ministry of Health and Family Welfare, government spending at the Central, state and local level combined, accounted for only 1.2 per cent of GDP.

“This implies that a significant part of the health care cost in India has to be borne by non-governmental entities, of which out-of-pocket expenses of households, including medical insurance, accounted for 2.2 per cent of the GDP and the remaining 0.4 per cent was accounted for by non-governmental organisations, external donors or local bodies,” the study by Sunil Kumar Sinha, Principal Economist and Director Public Finance, India Ratings said.

The country’s total health expenditure at 3.8 per cent of GDP in FY17 is much lower than both advanced and emerging economies considered to be its peers such as Brazil, China, Russia, Argentina and South Africa, the report said.

The share of government in current health expenditure in India is only 27.1 per cent while 62.4 percent is borne by households. “Over 60 per cent of rural households and 40 per cent of urban households with hospitalised cases borrow, sell their assets or rely on contributions from friends and relatives to pay for inpatient care,” the report said.

Such a high share of out-of-pocket expenses, the report said, imposes a financial hardship on household budgets and more than often pushes vulnerable households into debt and poverty.

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