GAP BETWEEN ALLOCATIONS FOR HEALTH AND OUTCOMES IN STATES

Source: Hindu

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Context

• The effectiveness of the health Budget allocations depends on various State-level parameters. 
• Many health schemes fall under the purview of Centrally Sponsored Schemes (CSS). 
• Fiscal space and well-structured operational frameworks at the State-level are imperative to absorb such funds effectively.

Details

Overview of finances 

• The Ministry has been allocated Rs 90,659 crore in 2024-25.
• This is an increase of 13% over the revised estimates of 2023-24.
• During 2024-25, the Department of Health and Family Welfare accounts for 97% of the Ministry's allocation.
• The Department's allocation is an increase of 13% over its estimated expenditure in 2023-24.
• Department of Health Research has been allocated Rs 3002 crore, which is up by 4% over its estimated expenditure in 2023-24.

Key Health Initiatives

The Union is pushing two big CSS schemes to improve health infrastructure: 

•  PM-ABHIM
• Human Resources for Health and Medical Education (HRHME): Scaling up medical personnel by establishing new medical, nursing, and paramedical colleges and increasing seats.

Low Fund Utilization

Despite these, there has been low fund utilization in recent years:

• The Actual Expenditure to Budget Estimate ratio in PM-ABHIM was only 29% in 2022-23.
• Only a quarter of the funds were spent both in 2022-23 and in 2023-24 by HRHME.

Several factors contribute to this:

• 60 percent of the Health and Wellness Centres component was recommended by the 15th Finance Commission from health grants, but only 45 percent of such grants were utilized during 2021-2024.
• Complex execution at the state level itself was one of the reasons pointed out by the state-level officials.
• Integrated District Public Health Laboratories: Integration with the public health laboratories across the vertical programs resulted in large-scale rearrangement and delayed implementation.
•  Block level Public Health Units and Critical Care Hospital Blocks (CCHB): It involves construction wherein fund absorption is constrained due to inflexible procedures and duplication of funding sources.

Faculty Shortage:

• The shortage in teaching faculty is one of the challenges of HRHME.
•  In 11 newly created AIIMS, there is a shortage of 40% faculty. 
• In Uttar Pradesh, in 17 government medical colleges, around 30% of the teaching faculty posts were lying vacant in 2022. 
• As per the rural health statistics, more than two-thirds of the posts of specialists at rural CHCs continued to remain vacant in 2021-22, thereby hampering the establishment of CCHBs under PMABHIM.

Fiscal Space in States

• State governments will need to bear the recurring costs for maintaining the infrastructure developed under PM-ABHIM and HRHME. 
• The Union government’s support for human resources under PM-ABHIM is only until 2025-26.
•  Hence, State fiscal capacity to plan for recurring expenses beyond this period is crucial.

Is State-Wise Healthcare Budget Allocation Consistent With the Disease Burden in India?

Key Challenges

• India faces difficulty in effectively allocating limited resources, with public health needs often secondary to government goals and political interests.
• Context-specific health economic evidence is crucial but challenging to generate. 
• Disability-Adjusted Life Years (DALYs) can help quantify disease burden for targeted populations.

State-Level Trends in Disease Burden

• The India State-Level Disease Burden Initiative (2017) reported a 36% drop in DALY from 1990 to 2016. 
• However, significant variations exist across states:

• Highest Disease Burden: Assam, Uttar Pradesh, and Chhattisgarh.
• Lowest Disease Burden: Kerala and Goa.

• Additionally, the epidemiological transition also differs significantly:

• Non-Communicable Diseases (NCDs) dominate in states like Kerala, Goa, and Tamil Nadu.
• Relatively Lower NCD Dominance: States like Bihar, Jharkhand, and Uttar Pradesh.

Health Expenditure Trends

• Current health expenditure as a percentage of GDP decreased from 3.60% in 2015 to 3.01% in 2019.
• In 2001–02, only 2.4% of the total municipal budget was allocated to health, accounting for a mere 0.02% of GDP.
• According to NFHS-5 (2019-21), households with at least one member covered by health insurance or financing schemes increased to 41%, compared to 28.7% in NFHS-4 (2015-16).

Findings of a study by National Center for Biotechnology Information conducted in 2022

• States with larger populations and lower health development indicators receive lower healthcare budget allocations per DALY compared to smaller, populous states.

•  These differences are indicative of the need to adjust budget allocation based on disease burden and population size.
• Communicable disease prevention programs have been relatively successful due to their predictability and geographically uniform nature. 
• However, the rise in NCDs requires targeted interventions and a stronger focus on preventive care. 
• India’s healthcare budget allocation remains low at <0.5% of GDP for non-communicable diseases and injuries (NCDI), particularly in poorer states.
• The fragmented governance across states and insufficient coordination in the healthcare sector hinder effective use of allocated resources. 

Way Forward

Strengthening Public Financial Management

• Simplification of elaborate machinery for grant allocation and implementation would facilitate easier execution of grants.
• Regular auditing while establishing proper monitoring mechanisms would lead to transparency and accountability in the use of funds

State Fiscal Capacity Enhancement

• States need to make effort towards creating fiscal space so as to absorb the recurring costs required towards sustaining health infrastructures.
• Creation of a dedicated health fund or an increment of share of State revenue for health expenditure to meet future obligations.
• Encourage PPPs in healthcare with a view to decrease the financial load of States.

Human Resource Gaps

• Improved recruitment for vacant posts
• Incentivizing them with salary, career development programs, infrastructure support, etc.
• Telemedicine and e-health initiatives regarding shortages in rural and remote areas, etc.
• The state level leadership should be in a better position to handle the operational complexities of the large-scale health program.

Improved Coordination and Rationalization Schemes

• There is a need for streamlining coordination between the State and central government ministries to reduce duplication of funding and components of the scheme.
• Harmonization of the implementation structures and clear roles and responsibilities between the two levels of government will ensure efficiency.
• integration of the vertical health programs will also eliminate duplicate structures for most of the diseases, thus streamlining the use of available resources.

Infrastructure Development

• The delays in infrastructure development should be avoided by fast-tracking the approvals.
• The best practices may also be emulated by states from various successful health infrastructure projects executed to overcome bottlenecks in implementation

Engagement of Local Communities and Stakeholders

• By involving local stakeholders in the process of health care delivery, resources are bound to be better utilized
•  Subdelegating the decision-making processes at the district level, along with feedback loops, helps in quick realization of various health needs of the regions.

Leveraging Technology

• Health information systems, digital platforms, and data analytics should be introduced.

Read about Healthcare sector in India: https://www.iasgyan.in/daily-current-affairs/reducing-the-poors-health-burden

Read about Digital Healthcare sector in India: https://www.iasgyan.in/daily-current-affairs/global-initiative-on-digital-health-16#:~:text=Over%2075%25%20of%20the%20healthcare,has%20increased%20by%20over%20200%25.

Sources: 

Hindu

PRACTICE QUESTION Q:  Public health system has limitations in providing universal health coverage. Do you think that the private sector could help in bridging the gap? What other viable alternatives would you suggest?. (UPSC CSE 2015) (250 words)