Govt Records Significant Decline in Out-of-Pocket Health Expenditure, NHA Estimates 2021-22

This significant drop in OOPE is a step towards the Indian government's goal of reducing OOPE to 35% of THE by the financial year 2025-26 (FY26).

India has achieved a notable reduction in out-of-pocket health expenditures (OOPE), according to the National Health Accounts (NHA) 2021-22 estimates released by the Ministry of Health and Family Welfare.

The report indicates that OOPE—which represents healthcare costs paid directly by households—dropped to 39.4% of total health expenditure (THE) in 2021-22, down from 48.8% in 2017-18.

This decline is attributed to an increase in government health spending, which rose from 40.8% to 48% during this period.

This significant drop in OOPE is a step towards the Indian government's goal of reducing OOPE to 35% of THE by the financial year 2025-26 (FY26).

Union Health Minister JP Nadda hailed the findings, emphasizing that the increase in public healthcare financing and the reduction in OOPE reflects India's progress towards achieving Universal Health Coverage (UHC) as outlined in the National Health Policy, 2017.

The decline in out-of-pocket health spending is also driven by the expansion of government healthcare schemes such as Ayushman Bharat and the rising contribution of private health insurance.

The coverage of private health insurance increased from 5.8% in 2017-18 to 7.4% in 2021-22, offering financial relief to many Indian households.

Slight Decrease in Social Security Health Expenditure

The report shows a slight reduction in social security health expenditure, which includes government payments for premiums on health insurance schemes such as Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY).

This expenditure dropped to 8.7% in 2021-22, down from 9% in 2017-18. This category includes other state health insurance schemes, employee benefits, and government reimbursements for healthcare costs.

Government health expenditure has increased marginally, rising from 1.35% of GDP in 2017-18 to 1.84% in 2021-22. This is in line with the government’s goal of raising public healthcare spending to 2.5% of GDP by 2025.

The report also highlights a sharp increase in per capita health expenditure, which nearly doubled from INR 1,753 in 2017-18 to INR 3,169 in 2021-22.

NHA's Insights on Evidence-Based Healthcare Policy

Health Secretary Apurva Chandra noted that the trends in the National Health Accounts reflect the progress of India’s healthcare system. He added that the NHA provides crucial insights into India's health sector, enabling evidence-based policy-making.

“The NHA is a powerful monitoring tool that helps evaluate the government’s healthcare policies and promotes further advancements in the health sector,” Chandra said, emphasizing the ongoing improvements in India's healthcare infrastructure and public health services.

By reducing the financial burden of healthcare, India is making significant strides towards improving healthcare access and ensuring that its citizens can benefit from affordable healthcare. These efforts are expected to further reduce OOPE and enhance the country’s overall health outcomes.

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