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India's health sector is lagging behind other countries. Pixabay

A report by the Niti Aayog has admitted that India’s health system is underperforming and lagging behind many comparable countries in key performance indicators.

NITI Aayog on Monday released a report titled ‘Health Systems for a New India: Building Blocks — Potential Pathways to Reforms’.


“Severe fragmentation, compounded by market failures and governance challenges, is the key driver of India’s underperforming health system,” the report said, pointing to the fragmentation of health services as a major challenge.

Niti Aayog said the report charts a clear roadmap for the complete transformation of India’s health system. It focuses on breaking silos in the health space and removing fragmentation between various initiatives, ensuring greater convergence between ministries as well as the Centre and the states, as already initiated under the Ayushman Bharat scheme.

The report identified five focus areas of future health system — deliver on unfinished public health agenda, change health financing away from out of pocket so spend into large insurers, integrate service delivery vertically and horizontally, empower citizens to become better buyers of health, and harness the power of digital health.


Severe fragmentation, compounded by market failures and governance challenges, is the key driver of India’s underperforming health system. Pixabay

“At the systems level, overcoming the challenges of fragmentation across healthcare financing and service delivery will help us optimise both quality and access. India now needs to build on its many opportunities to achieve further progress on the health of its citizens and respond to the growing aspirations and needs of a new India,” said Rajiv Kumar, Vice Chairman, NITI Aayog.

The report noted that health financing is fragmented at all three levels — revenue sources, health insurance (financial risk pooling), and strategic purchasing (how funds are used to set incentives for service providers to maximise efficiency, responsiveness and quality in the health service provider market).

There are high levels of fragmentation in the sources of revenues, with most health expenditure (about 62 per cent) coming directly from households.

Currently the government (Union and the states put together) spends roughly 1.13 per cent of GDP on health, which is grossly inadequate compared to similar spending by other countries.

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As a result, 62 per cent of healthcare spending is financed by households through out-of-pocket expenditure at the point of care.

Lauding the significant improvements made in India’s health sector, Bill Gates, co-chairman of Bill and Melinda Gates Foundation, said that primary healthcare is extremely important for all. India is in a very hopeful situation, he said, and is set to be an example for other countries. (IANS)


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