Budget 2014: A look at Public Health

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HealthGDPThe new budget is set to be unveiled next week and there is a lot of speculation on the direction it will take. The blog will do a series on the budget and it’s implications for the nation.

Today’s post takes a look at an oft overlooked aspect of the budget: public health expenditure. I take a look at statistics on the nature of the public health system in India. It is clear that the health care system in the country is ill equipped to care of the population. The state’s unwillingness to invest in health infrastructure is difficult to understand, given India’s consistently poor showing in health outcomes. It is clear that the government needs to allocate more resources towards creating an affordable health care system, especially for the poor.

Graph 1 looks at public health expenditure as a % of total public expenditure. Graph 2 looks at health expenditure as % of GDP for all BRICS nations. Graph 3 looks at the proportion of private and public hospital beds in 2000 and 2010. Graph 4 looks at out-of-pocket medical expenditure in India and other Low and Middle Income Countries. All data for this post came from the WHO reports, the World Bank database and this McKinsey Report.

India seems to spend a minuscule amount of public expenditure on health outcomes, with expenditure on health not even touching 0.5% of total public expenditure.

Public Health Expenditure-page-001

India’s expenditure on health is paltry, even when compared to other BRICS nations.



The Indian medical system is also skewed towards private care which can be seen by a dramatic increase in private hospital beds over the past decade. Private hospitals are taking over as the dominant health care giver in the country.



Finally, we see that insurance and government help are minimal in health care. India has one of the highest rates of out-of-pocket expenditure on healthcare, even when compared to other countries with similar incomes (LMIC).



While India is being viewed as hub for medical tourism, providing cutting edge medical care to foreigners, the public health system remains overburdened and under-equipped. India’s health infrastructure lags way behind world standards with the country reporting only 1.3 beds per 1000 persons in 2010. Only 0.47 of these beds are in public hospitals. The global average in 2002 was 2.60 beds.

Most medical expenditure is paid out-of-pocket making this a huge financial shock to the patients and their families. Given the vast numbers of rural and urban poor who can ill-afford such a shock, this is particularly worrying. Poor levels of health insurance and low state protection need to be addressed.

A strong, public health system which provides good, affordable care and ensures a safety net is the need of the hour. This budget provides an opportunity to vitalize this historically neglected sector.



One thought on “Budget 2014: A look at Public Health

    Vaidy said:
    March 9, 2015 at 2:54 am

    Excellent. Did you do a similar series of posts for 2015?

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