Union Budget 2018: Poor diagnosis, wrong medicine

The focus in the Union Budget on tertiary healthcare at the cost of primary and secondary healthcare is flawed. A publicly-financed health insurance scheme is no substitute

Written by Sourindra Mohan Ghosh , Imrana Qadeer | Updated: February 3, 2018 2:29 pm

The share of the National Rural Health Mission (NRHM) in total health expenditure has fallen from 52 per cent in 2015-16 to 44 per cent this year. (Illustration by C R Sasikumar)

If the past three Union budgets were any indication, this budget’s approach to the health sector should not have surprised anyone.

The prescription in the National Health Policy (NHP) 2017 to increase the government’s (Centre and the states together) health expenditure from the existing 1.15 per cent of the GDP to 2.5 per cent by 2025 finds no reflection in this budget. Instead of spending at least 1 per cent of the GDP as proposed by the draft NHP document, the provisions for health in Union budget presented by Finance Minister Arun Jaitleyon Thursday has reduced allocation to 0.29 per cent of the GDP from 0.32 per cent last year. The total nominal allocation for the health sector stands at Rs 54,600 crore compared to last year’s expenditure of Rs 53,294 crore. Accounting for inflation, there is no increase in budgetary allocation in real terms.

There is a further shift in priority from primary care to tertiary care, without any increase in overall allocations. Urban/city-based institutions received even greater priority in the budget. Allocation for the Pradhan Mantri Swasthya Suraksha Yojana (building AIIMS-like institutes, upgrading government medical colleges etc) increased by Rs 650 crore in nominal terms or by 18 per cent in real terms after adjusting for inflation. On the other hand, funds for upgrading district hospitals were reduced by 14.5 per cent in real terms, compared to last year.

The requirements of primary healthcare, particularly for rural areas, have been completely ignored. The share of the National Rural Health Mission (NRHM) in total health expenditure has fallen from 52 per cent in 2015-16 to 44 per cent this year. Its funds were cut even in nominal terms by almost Rs 1,200 crore. Within the NRHM, cuts were quite drastic for reproductive and child healthcare (Rs 2,291 crore in nominal terms, or 32 per cent in real terms) and for communicable diseases care (Rs 720 crore in nominal terms, 28 per cent in real terms). The budget proposed an increase of Rs 1,356 crore for strengthening health systems under the NRHM. One may presume that this will provide for the Rs 1,200 crore the finance minister has budgeted for setting up the 1.5 lakh “health and wellness centres” mentioned in his speech.

Union Budget 2018: What Has The Government Proposed

However, this works out to an average of Rs 80,000 per centre. Their effectiveness in the absence of a strong supportive infrastructure remains questionable. On the other hand, funds for the maintenance of infrastructure under NRHM have not been increased. All of these mean that the existing shortfalls in public health and primary care facilities — 20 per cent shortage of health sub-centres, along with 22 per cent and 30 per cent shortage of primary health centres and community health centres (as per Rural Health Statistics 2016) — is unlikely to be addressed. This reduction of public expenditure under NRHM is a death sentence for an already dying rural public health infrastructure.

NRHM’s urban counterpart, the National Urban Health Mission (NUHM) has been allocated only Rs 875 crore. For the period from 2012-13 to 2016-17, its estimated average yearly budgetary requirement was Rs 3,391 crore, provided from central funds.

In the allied sectors, the allocation for core ICDS has increased only slightly over the last year — by 4.7 per cent in real terms after adjusting for inflation. The National Rural Drinking Water Mission, the prime minister’s flagship programme, Swachh Bharat Mission (Rural), and maternity benefits under the Pradhan Mantri Matru Vandana Yojana saw reduced allocations in this year’s budget compared to last year’s expenditure. One positive step is the introduction of nutrition support for TB patients, even though it is a meagre Rs 500 per month per patient.

Political Flavour of Union Budget 2018

This continued neglect of public healthcare infrastructure and shifting the focus away from poorly developed primary healthcare to super specialty tertiary care will only clog secondary and tertiary public hospitals with diseases preventable or treatable at lower levels of health services. While there is a need to expand public hospitals in tertiary care, it cannot be made at the cost of primary care. The poor incur huge out-of-pocket expenditure due to non-availability of primary care services, the prime cause of the crisis in public health. A lopsided expansion of high-end hospitals won’t solve this problem.

Amidst the overall neglect of the healthcare sector and public health, the government has pushed for publicly-financed health insurance as a substitute. However, the allocation of Rs 2,000 crore for health insurance under RSBY does not seem to match the promise of a comprehensive national health insurance scheme with coverage up to Rs 5 lakh per family for 10 crore families. An earlier government estimate for Rs 1 lakh coverage per family had proposed a much higher Rs 4,800 crore per year.

Insurance as a substitute for public infrastructure can be counter-productive. An increased role for the unregulated private sector can inflate healthcare costs and push up insurance premiums, which are to be paid by the government. This will stress the public exchequer. Assuring the private sector a market by paying the poor’s medical bills through insurances may help expand markets and revenues but not adequately make up for the absence of public infrastructure in under-served areas.

Overall, in the absence of a strong public sector, a publicly-financed health insurance may end up primarily boosting private profits. This budget reflects a flawed approach towards the health needs of a majority of Indians.

Ghosh is a PhD scholar at the Centre for Economic Studies and Planning, JNU and Qadeer headed the department of Social Medicine and Community Health at JNU

For all the latest Opinion News, download Indian Express App