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Before union budget’s cutback, State health budgets rose to 21 percent

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New Delhi: An analysis of government data released in October 2015 revealed that state health budgets, taken together– rose 21 percent in the previous year, before the 15 percent ‘cut’ in central funding of national health programs in the union health budget of 2015-16.

However, this increase is not uniform across states, indicating that states, especially smaller ones, unable to raise enough money, are spending less on health and education. Exactly how many states spent to compensate for central spending cutbacks over the past year is unclear because that data will only be available by the end of 2016.

As many as 58 per cent of Indians in rural areas opt for private healthcare (68 percent in urban areas), as we reported, because public health care is inadequate, and healthcare expenses push an additional 39 million people back into poverty every year, a Lancet paper said.

In anticipation of the transfer of money to states – a process called devolution, proposed in December 2014 by the 14th Finance Commission, Delhi had increased payments to state plans during the 2014-15 budget: Transfers rose by 108 percent to Rs 2,59,855 crore ($43 billion) for the state plans, according to reporters.

Many increases to states were substantial, particularly in key areas such as village development, education, health and agriculture. The idea, to quote from a government document, was to “provide greater ownership to state governments in implementation of plans schemes and avoid thin spreading of resources, model of restructured centrally sponsored schemes (CSSs) continues. Higher allocation under State/UT (union territory) plan is reflective of this”.

Between 2014-15 and 2015-16, unconditional transfers of tax revenues – or “untied” funds, to use official jargon– rose 55 percent, from Rs.3.38 lakh crore to Rs. 5.24 lakh crore, according to the budget’s revised estimates released in October 2015 (The budget is prepared using income estimates, typically revised after six months to account for actual tax received).

The union health budget rose six percent, from Rs.29,492.5 crore in 2013-14 to Rs. 31,274 crore in 2014-15, the year the National Democratic Alliance (NDA) presented its first budget. The cuts came in the second year of the NDA, 2015-16.

Smaller states can’t find money, therefore, cut health funding.

Although 18 states with poor health indicators, called “high-focus states”,– increased health spending in anticipation of central cutbacks, our analysis reveals how smaller states have cut health spending because they did not have the money.

Jharkhand and Odisha increased their health spending by 80 percent and 73 percent respectively between 2013-14 and 2014-15. Some states saw marginal increases; Tripura and Manipur cut health spending.

Money to create infrastructure has risen in state budgets, from 37.2 percent in 2011-12 to 50 percent in 2014-15, while funds for staff salaries and other administrative expenses fell from 62.2 percent to 49.9 percent.

“The country is close to completing its first budget cycle since the implementation of the FFC (14th Finance Commission) recommendations; any rigorous assessment of the real impact of these recommendations is difficult owing to large gaps in available data,” said a report from the Accountability Initiative, a Delhi-based think-tank. (Prachi Salve, IANS/indiaspends.org)

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Fragmentation Reason Behind Low Performance of Indian Healthcare

Fragmentation is the reason behind Indian healthcare's poor performance

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Indian healthcare
The reason behind the poor performance of the Indian healthcare is fragmentation. Pixabay

The vicious cycle of severe fragmentation is the reason for low performance of Indian healthcare, in comparison to other countries in Asia and elsewhere, a top official has said.

In his address at the inaugural function of the 24th edition of IIHMR University’s annual event ‘Pradanya’ with the theme “Future of Healthcare: Globalization, Innovations and You”, Special Secretary, NITI Aayog, Yaduvendra Mathur said: “The time has come to unify and transform the healthcare system to achieve optimum outcomes in terms of public health and Sustainable Development Goals.”

“India’s healthcare system lags much behind other nations. India figures at number 145 in global healthcare, compared to 92 for China, 71 for Sri Lanka, 138 for Indonesia and 111 for Egypt. The Out of Pocket (OOP) expenditure for India is high at 63 per cent, compared to just 36 per cent for China and 37 per cent for Indonesia.

“Such sub-par performance of Indian healthcare is due to its deeply fragmented nature. This fragmentation needs to be addressed through better risk profiling/insurance of patients, strategic purchase of medicines and medical supplies by government and care givers, better organization of healthcare delivery, and creating a digital health landscape.

Poor healthcare
India’s healthcare system lags much behind other nations. Pixabay

“Ayushman Bharat and initiatives like National Medical Commission Act and National Digital Health Blueprint have created a strong foundation for such integration,” he added.

The future health system of India needs five focus areas: Deliver on the unfinished public health agenda, shift health financing away from out-of-pocket spend to larger insurers, integrate service delivery horizontally and vertically, empower citizens to become better buyers of health, and harness the power of digital health, Mathur suggested.

Also Read- Logistics Cost More Expensive in India than USA: Expert

In his address, IIHMR University Chairman, Dr S.D. Gupta said: “Future healthcare is intrinsically linked with globalisation and technological innovations. We need to visualise what the scenario is going to be in India in the next 30 to 40 years.”

The three-day programme, which started Monday, saw over 35 health experts from India and abroad attending the technical sessions and panel discussions. (IANS)