Healthcare Financing

  1. Increasing Public Health Expenditure: One of our national priorities in the health sector is to increase public health expenditure. This requires in the least a good tracking of current public health expenditure by both central and state governments, and to the extent possible by other government departments and local bodies. There is also the need for advocacy to support increases in public health expenditure.

  1. More value for money: Given the reality that the requirements of "fiscal consolidation" policies have a disproportionate impact on health budgets, there is the need to enhance effectiveness in utilization of existing budgets, and develop better costing and cost effectiveness to guide resource allocations for both provisioning and purchase of services. Flexible resource allocation, financing mechanisms and financial monitoring also need to be developed as tools of programme improvement.

  1. Financial Protection: Another national health policy objective is financial protection from health care costs. The main strategy for achieving this is the availability of free or subsidised services provided by the public sector. A sub-component of this agenda is to ensure access to free drugs and diagnostics through the public health system. Supplementary strategies to achieve this are insurance schemes, different forms of public purchasing of services and demand side subsidies like the Janani Suraksha Yojana. Monitoring progress in financial protection through measurement of out-of pocket expenditure and costs of care has gained importance and immediacy, thanks to the Universal Health Coverage discourse.

  1. Engaging the Private Sector: Given the size of the private sector, and its contribution to both service delivery and health care costs, there has been a constant effort over the last two decades to work out partnership mechanisms. The challenge has been to design schemes that are cost effective, pro-poor, supplement rather than substitute public investment and provisioning and are sustainable. Good documentation and evaluation of existing and past efforts help, and so does technical assistance to design better contracts. One major area of success in this domain is the development of emergency ambulance and patient transport systems using public private partnerships. There is much to learn from the success and failures of other efforts in this direction.

"No individual shall fail to secure adequate medical care because of the inability to pay for it"


Bhore Committee Report, 1946