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India needs to hike public spending on health: official

Aug 28, 2014

A minimum of 2.5% of India’s GDP is required to be spent on health for providing a reasonable package of healthcare services.

New Delhi: Highlighting the key healthcare challenges including financing and service delivery mechanisms in India, Secretary-Health,  Ministry of Health and Family Welfare, Lov Verma at the 8th Health Insurance Summit, said, “I am of the view that to achieve universal and affordable health coverage, reform in health financing holds the key.”

The 8th Health Insurance Summit with “Leveraging the Power of a Billion People” as its theme was organized by the Confederation of Indian Industry in New Delhi.

Verma said that India would need to step up the level of public spending on health to a minimum of 2.5% of GDP by 2017 to provide a reasonable package of healthcare services to its citizens.

“Roughly, 70% of this has to be on comprehensive primary care as good primary healthcare minimizes hospitalization and tertiary care. Verma told that insurance deals best with hospitalization, and costlier and rarer events and tertiary care is most suitable for universal health insurance. The dream of leveraging the power of a billion people assumes significance only when the coverage is universal with no adverse selection,” he said.

Elaborating on the challenges faced by India, Verma stated that India, with 60% Out-of-Pocket-Expenditure (OoPE) had one of the highest OoPE, which was a major cause of impoverishment of the country’s population.

“To address this challenge of providing financial protection, different countries have adopted different approaches – either strengthening supply side, or demand side measures – while India traditionally followed a tax-based supply side strengthening process. Insurance was introduced much later, but today health insurance is a demand-side financing tool that is gaining popularity across the world,” he said.

Verma said that it is estimated that 400 million people were covered in 2012, and according to a World Bank report, health insurance coverage in India is expected to cross 630 million people or 50% of the population by 2015.

He emphasized that innovative and cost effective solutions is the key to achieving the aspirations of billion people and improve the quality, efficiency and accountability of public and private health systems for the large and common benefit of the people.

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