India’s growth dependent on growth of India’s Health Sector – Shri N. K. Singh

15th Finance Commission reviews India’s Health Sector

The Fifteenth Finance Commission (XVFC) led by the Chairman Shri N.K. Singh, on 19th December 2018, held a meeting on with Ministry of Health and Family Welfare including the Union Minster of Health Shri J.P. Nadda, Ministresof State, Health Shri A.K. Choubey and Smt. Anupriya Patel.

At the meeting the Commission was given a detailed proposal on fund requirement by the Department of Health and Family Welfare (DoH&FW). Some of the major proposal were:

• For untied funds: Health Infrastructure status of the States to be used as a criteria-will help States with significant infrastructure deficit and health lag to get more funds.
• 10% of fund to be earmarked for the health sector with atleast 2/3rd being reserved for the primary health.
• For performance based incentives: composite health index to be utilized to encourage states to demonstrate performance on year on year basis – should have a weightage of 20% in the performance linked pool.

The DoH&FW informed the commission that the major targets of the National Health Policy 2017 were:

• Increase public health expenditure to 2.5% of GDP, in a progressive manner, by 2025.
• Increase State sector health spending to more than 8% of their budget by 2020.
• Primary Health Expenditure to be 2/3rd of the total health expenditure.

Some of the preliminary issues on the Health Sector under the focus of XVFC are:

• Skilled manpower and conditional financial allocation - the two main challenges of the Health Sector today.
• The change of disease spectrum from infectious diseases to degenerative diseasesrequiring the need to strengthen the Community Health Centers and District Hospitals in the States.
• The health sector as a key driver of the 21st Century economy on account of its employment potential and need to improve the medical education in the country. Need to increase the post graduate doctors in the country.
• Need to create ‘Cooperative Model’ rather than a ‘Competitive Model’ between Public andPrivate Hospitals.
• Integration of the initiatives taken by the Government like ‘Ayushman Bharat’ and ‘Swachh Bharat Mission’.
• Need for a comprehensive ban of private practice by Government Doctors.
• Optimum utilization of the funds allocated by the Centre to the States on Public Health.
• Need to open more Medical Colleges and Hospitals, for training more manpower which could enable to build the gap between doctor-patient ratios.
• Need to think in the lines of the price control mechanism in the pharmacy and drugs market and thereby bring uniformity in the Health Care facility.
• Proposal to include officials from National Health Accounts Division in Ministry of Health which is monitoring the funds allocated to the States. Requirement of data on funds allocated to the States and their optimum utilisation and outcomes.

During the meeting, the Commission highlighted the need to focus on the following issues:

• The way to extract best economic returns from investment already made in health sector.
• Need for a robust audit system in each hospital with a database of statistics of all PHC, CHC, District hospitals etc. The technology enables the daily uploading of data of OPDs, active beds/occupancy, blood tests, ultrasounds, MRIs, deliveries, blood collection, dialysis, surgeries, specialists/nurses working, ICU beds, ventilators etc.and should be available in public domain.
• Ways to increase capability in terms of manpower to face big change for ambitious programmes like PM-JAY.
• Important regulatory legislations for health sector and on which the Ministry should make every effort to secure early Parliament approval. For instance, National Medical Commission, Allied Health Bill deserve priority.
• Horizontal distribution, which is subject to growth without condition is state’s entitlement to receivebesides state’s specific grant could also be considered by Finance Commission.
• The options/cost/opportunity of the Ayushman Bharat needs to be fully articulated, particularly in relation to its medium term financial implications for Centre and the States. The estimates, premium of insurance companies have widely varying estimates and need greater consistency/credibility.

The Commission would be forwarding their written comments to the Ministry soon and seeking their comments/actions proposed.

Health sector funding allocation to prioritise infrastructure deficit states and performance linked incentives for primary care strengthening. The Fifteenth Finance Commission recommended targeted central support to health by using health infrastructure status to allocate untied funds, earmarking 10% of funds for health with two-thirds for primary care, and establishing a performance-linked pool driven by a composite health index (20% weight) to reward annual improvements; it stressed National Health Policy 2017 targets on progressive public health expenditure, increased state health budget shares, and primary care dominance, while urging workforce expansion, strengthened CHCs and district hospitals, enhanced audits and public facility data reporting, and prompt action on regulatory legislation.