Why Healthcare Is Faltering - Govt Spends Rs 1,108 For Aam Aadmi, Rs 6,300 On Babus For Health

If what the central government spends on providing healthcare for its own employees is a measure of what decent healthcare costs, what governments (central and states put together) spend for the ordinary citizen is a paltry sixth of that amount. The recently released National Health Accounts (NHA) 2014-15 shows that the average government spend per citizen per year was just Rs 1,108, against almost Rs 6,300 per central government employee.

Even the most generous government spending among states, Himachal Pradesh at just over Rs 2,000 per capita, doesn't come close to matching this.

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According to the NHA, India's total health expenditure in 2014-15 worked out to Rs 3,826 per person. Of this, what people had to spend from their own pockets was Rs 2,394 (63 per cent). The government's expenditure on Central Government Health Services (CGHS) for serving and retired babus, current and ex-members of Parliament, the judiciary and so on was Rs 2,300 crore. Health Minister J P Nadda informed Parliament on February 27, 2015 that CGHS had 36.7 lakh beneficiaries. That makes it about Rs 6,300 per CGHS beneficiary.

This is close to the figure of Rs 6,376 per beneficiary is given by Nadda while replying to a Parliament question in December 2015. "This expenditure, however, does not include expenditure for hospitalisation in respect of serving government employees, which is borne by the respective departments/ministries," stated Nadda. Thus, the actual per capita spending on CGHS could be much higher.

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In 2014-15, the Union government's expenditure on the National Health Mission meant to boost the public healthcare system was Rs 20,199 crore. Spread it over a population of roughly 1.25 billion and you get a paltry Rs 162 per head.

If NHM had spent the same amount per capita on citizens as the central government spent on its own employees, it would have needed a budget almost 40 times bigger, or about Rs 8 lakh crore, or almost half of the entire government budget for that year.

A 2011 Planning Commission report on health insurance models had noted that CGHS spending was mostly driven by high-end tertiary care provided largely by big corporate hospitals. It noted that the average hospitalisation expenditure per beneficiary was the highest under CGHS. Though CGHS and the Employee State Insurance Scheme (ESIS) are the only insurance schemes providing comprehensive healthcare coverage, including outpatient care, preventive/wellness care and hospitalisation, the per capita spending on ESIS was just Rs 379 in 2014. ESIS covered 5.6 crore people at the time, including workers and their families. If the National Health Mission aspired to provide ESIS kind of coverage, it would only have had to increase its budget about two and a half times.

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The Planning Commission report stated that ESIS was probably managing to keep costs down because it relied heavily on its own facilities, unlike CGHS, which has increasingly become dominated by private providers. This appears to have reduced whatever little incentive legislators, bureaucrats and judges might have had in ensuring a well-running public health system as they hardly depend on it.

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CGHS is predominantly funded by taxpayers. Contributions from employees form a small fraction of what is actually spent. For the common man, healthcare spending has become the second most common reason for indebtedness and impoverishment. An estimated 39 million are pushed below the poverty line due to healthcare expenses. However, policymakers of all sorts ¡ª MPs, current and former, and high-level bureaucrats, serving and retired ¡ª and judges have no reason to worry about rising healthcare costs as the taxpayer takes care of them.