Accounts data shows that central, state, and local governments together account for only about 20% the total health expenditure in India, with greater than 75% of the health spend comprised of un? pooled, out? of? pocket expenditures. ii This level of out? of? pocket expenditure is one of the highest in the world. External aid to the health sector, either to the government or via NGOs, accounted for negligible 2% of the total health expenditure.
Health Delivery in India: In India, the government is both a financer as well as a provider of health care. Households, particularly poor households, are expected to seek care in the grossly under? resourced network of government health services. Not surprisingly, due to uneven quality of care, and high absenteeism, patients often shift away from public health services to private health services for their care. Studies show that about 72% of outpatient care and about 40 – 60% of inpatient care is sought from the private health sector. ii This has implications for lower income patient communities. About 6% of patients who require hospitalization do not seek health care because they cannot afford it. iv Among those who seek hospital care, about 25 – 40% of patients have to borrow or sell their assets to meet their medical expenses. v All these figures are aggregate, the picture is worse if one disaggregates along the divides of urban / rural; male / female; upper quintile / lower quintile; upper caste / lower caste etc.
Building a More Equitable Health System: The Government of India recognized inequities in its health delivery and financing infrastructure and has introduced various measures to solve it. One measure was to increase the budgetary 1 This case study was compiled by the Results for Development Institute with inputs from Nishant Jain, GTZ India and the Ministry of Labour and Employment in India. allocations for health care.
The National Rural Health Mission (NRHM) promises to increase the government spending on health care from the current 0. 9% of GDP to 3% of GDP. vi However, just increasing the budget for health is not a solution in itself, and it has been seen that absorptive capacity of the public health care system is not adequate; even the current level of spending by the government is not being properly utilized. The government has introduced various demand side financing mechanisms to provide financial protection for