B Ramana: Have health budgets changed much for India?

ramanaLast week India’s Union budget was passed by the Union finance minister P. Chidambaram. It was met with mixed reactions by markets and pundits.

As a healthcare professional interested in the general health of India, I found myself getting straight to the section on health in the finance minister’s speech. The minister started off by saying that the “right to health and education remain our priorities.” It struck me as a telling reflection of reality: India continues to rank among the lowest in the world in terms of healthcare and education. Has any finance minister ever stated in his budget that health and education was not a priority and he did not believe in spending money on them?

Thus, the question that needs to be answered is, if every budget has focused on healthcare and education since 1947, why hasn’t it worked? In less than the same time, countries as diverse as South Korea, Malaysia, Thailand, Singapore, and Israel have made dramatically bigger gains. The healthy sceptic may be justified in questioning the very basis of the government’s premises. Perhaps the government is not the solution to healthcare, and possibly part of the problem?

Nevertheless, one can’t expect such heretical anti-establishment thoughts to come from the state. Getting back to the budget, this year the state has proposed allocating RS 37,330 crore to the Ministry of Health and Family Welfare, and an additional RS 4,727 crore for medical education and research.

Experts do not think much of this 24% increase in healthcare allocation. One needs to think how well such allocations have actually worked in the past. Eventually, the funds derived from productive sectors are being spent inefficiently in the healthcare sector. We repeatedly hear stories of sloth, inefficiency, and corruption in most areas that the government spends heavily in, and healthcare has not been an exception.

Health policy experts watching and analysing successive budgets seem to believe that outlays may not necessarily translate into outcomes, particularly in state subjects such as health. More than the budget itself, post-budget steps such as foreign direct investment in insurance, liberalising the health sector, or training and integrating traditional health workers into the formal system may work better, they feel.

The government has decided to spend more on alternative medicine: “Ayurveda, Unani, Siddha, and Homoeopathy are being mainstreamed through the National Health Mission. Chaidambaram has proposed allocating Rs 1,069 crore to the Department of AYUSH. However the attempt to prop up the public health sector with the help of  more “barefoot doctors” has faced stiff opposition from the Indian Medical Association.

The budget seems precariously poised to fall into the same trap as many of its predecessors. The premise that the state can do more by spending more is a fatal flaw. While State controlled healthcare is successful in Scandinavian countries (and perhaps a handful of other examples), there are many contrary dimensions to socialised healthcare that merit another post.

As far as India is concerned, more of the same is not going to make a positive contribution to health of the public. As has been proved beyond doubt, India’s unmanageable population, poor per capita income, and dismal state cover for health, test her tertiary healthcare system to the limits. Experts advocate more private sector participation in healthcare. What is the ideal balance between the public and the private—this question will remain key in formulating a workable health policy for the largest democracy of the world.

I have no relevant conflicts of interest.

B. Ramana is a surgeon based in Kolkata with interests in bariatric surgery and advanced laparoscopic surgery. He is India’s only certified Russian Kettlebell strength instructor. Follow him on Twitter @rambodoc

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  • Rahul Bahl

    It strikes me that the distinction between public and private is not always so clear cut especially with regards to healthcare in India. One of the more interesting government initiatives to improve access to healthcare I have come across is the Indian Government’s RSBY health insurance scheme. The scheme provides an electronic card to a household in exchange for a small transaction fee. They can then use this card at accredited hospitals to access healthcare.

    The scheme is administered by private health insurance companies who are paid for the number of people enrolled in their district. The tendering process for who gets to manage a particular district is run by the state government. While there are limitations to this and it is early days, the scheme utilises technology and the capabiilities of the private sector to try and expand access to healthcare in difficult circumstances.

    The point is that public spending on healthcare can make a difference if it is used creatively. Sometimes circumstances require us to break out of our traditional modes of thinking about how healthcare should be provided and try something new.

  • One thing of course is “how much has been allocated” as opposed to how well do we use this allocation. With the relatively good allocations coming down to states through the National Rural Health Mission, what we did not see is “good” use of these allocations. Districts and states, where the real “action” of health planning and service delivery is, are quite weak in putting in place systems needed for good health service delivery. Take for example, how states have automatically started “purchasing” services as if that is an easy option, instead of strengthening core problems in the government-owned servcies. I think the crucial problem is poor capacities at state and district – both political and technical.