National Health Accounts figures indicate high burden of health care costs on people
As per the latest figures from the National Health Accounts Estimates for India 2022-23, out of pocket expenditure is nearly half of the current health expenditure. Experts flag continued high level of unregulated privatisation, leading to major inequities in access to healthcare.
360° Perspective Analysis
Deep-dive into Geography, Polity, Economy, History, Environment & Social dimensions — AI-powered, on-demand
Context
The (NHA) Estimates for India 2022-23 reveals that despite government claims of increased health spending, Out-of-Pocket Expenditure (OOPE) remains nearly half of the Current Health Expenditure (CHE). Government Health Expenditure (GHE) still falls significantly short of targets and WHO recommendations, highlighting systemic vulnerabilities in India's healthcare financing.
UPSC Perspectives
Governance
The data underscores a significant gap between policy targets and implementation regarding health financing in India. The recommends that the combined central and state government health expenditure reach 2.5% of GDP. However, the NHA estimates place GHE at roughly 1.48% (new GDP series), far below this goal, and even further from the WHO recommendation of 5% for achieving (UHC). A concerning trend is the drop in GHE as a share of CHE from 41.1% in 2021-22 to 35.6% in 2022-23, indicating that the pandemic-era increase in health funding was not structural but transient. This regression challenges the sustainability of public health initiatives and raises questions about the government's commitment to prioritizing health in long-term fiscal planning. UPSC candidates should analyze this in the context of state vs. central funding, noting that state governments contribute over 63% of the Total Health Expenditure (THE), emphasizing the federal nature of health governance.
Economic
The economic burden of healthcare in India remains disproportionately borne by citizens, as evidenced by an Out-of-Pocket Expenditure (OOPE) constituting 49.90% of Current Health Expenditure (CHE). High OOPE is a primary driver of catastrophic health expenditure, which can push vulnerable households into poverty. Despite the existence of schemes like the (PMJAY), government-financed health insurance schemes account for a mere 3% of THE, while private health insurance (largely funded by households) is three times higher (9.2%). This indicates that publicly funded insurance is failing to provide adequate financial protection against high medical costs. The heavy reliance on out-of-pocket payments highlights market failures in healthcare provision and the limitations of the current insurance-based model in achieving equitable access.
Social
The NHA data reveals structural imbalances in healthcare delivery, heavily skewed towards the private sector and curative care. Private hospitals and pharmacies absorb over 52% of CHE, confirming that India's health system is deeply privatized. This unregulated privatization often exacerbates inequalities in access, driving up costs and promoting irrational treatment practices. Furthermore, the allocation for preventive care is critically low at only 8.88% of CHE, despite data indicating that Non-Communicable Diseases (NCDs) cause 60% of deaths. This lack of focus on preventive medicine is a major policy blind spot, especially as India undergoes a demographic transition towards an aging population. Ignoring preventive care will inevitably lead to an unmanageable burden of chronic diseases in the future, straining both the health infrastructure and the economy.