Financing Universal Health Coverage in India

In 2015, the Government of India made a commitment to the health and wellbeing of its citizens by ratifying the Sustainable Development Goals. SDG 3.8 obliges signatory states to realize Universal Health Coverage, which means that every member of society should receive quality health services without suffering financial hardship. To avert financial hardship, the SDGs mandate that risk protection be provided for all, thereby minimizing potentially catastrophic out-of-pocket health expenditures.

India has far to go in its journey towards achieving these goals on universal health coverage. Despite a rapidly growing economy that provides increasing fiscal flexibility, public expenditure on health has seen no significant increase for a decade (2005-2014), ranging from 1.1% – 1.4% of GDP. These figures compare poorly with India’s neighbours and fellow developing nations, many of which spend more on health care, including Nepal (2.3%), Bhutan (2.6%) and Sri Lanka (2%). The global average is also significantly higher at 6% of GDP.

Such low levels of public expenditure shift the burden of financing health care through out-of-pocket payments for services at the point of care. These services vary widely in quality and price. Out-of-pocket expenditures at the point of care account for 62.4% of total health spending, and are made in the absence of any widespread financial protection scheme. As a result, private spending on health care upsets the financial stability of an estimated 63 million Indians every year, driving them into poverty.

This problem demands urgent attention. India must spend more and spend better on the health of its people in order to alleviate the financial hardship faced by millions of families seeking basic health services. The SDGs recognize that it is only through universal coverage that the right to health for all can be realized, while ensuring that nobody “goes bankrupt when they get sick.”

Global Health Strategies, in partnership with the International Vaccine Access Center, Johns Hopkins Bloomberg School of Public Health, and the IKP Trust undertook a study to evaluate and recommend public financing mechanisms capable of sustainably delivering universal health coverage in India. The report was shared with Members of Parliament at a roundtable event, on ‘Health Care for All’, organized by GHS.

It recommends that in addition to earmarking a higher percentage of GDP incremental increases for health care, supplementary financing mechanisms and a national SHI scheme must be developed to provide financial protection to diverse populations. Finally, high impact system design changes and interventions must be prioritized, with a focus on improving primary care and programs like immunization that positively impact the productivity and prosperity of the whole country.