After gaining independence in 1947, India adopted the welfare state approach, which was dominant worldwide at that time. India’s leaders envisaged a national health system in which the state would play a leading role in determining priorities and financing and would provideIndian government in 1943 to investigate and recommend improvements to the Indian Public Health System, Bhore Committee noted in 1946 that “If it were possible to evaluate the loss which this country annually suffers through the avoidable waste of valuable human material and the lowering of human efficiency through malnutrition and preventable morbidity, we feel that the result would be so startling that the whole country would be aroused and would not rest until a radical change had been brought about.”

This statement has, unfortunately, not been heeded by India’s leaders, which has services to the population. Set up by thebeen reflected in three significant facts: the low level of investment and allocation of resources to the health sector over the years – about one percent of GDP with clear declining trends over the last decade; the uncontrolled and incredibly rapid development of an unregulated private health sector in the recent past; and, as a result of the first two facts, the undermining of roles and responsibility such as stewardship and governance. A healthcare policy statement only came about after the Alma Ata Declaration of the World Health Assembly in 1978, which advocated “Health for All” by the year 2000.

In the recent past, India has been resting on its medical laurels, but an international survey has revealed that the reality is an altogether different story. The country's healthcare system fails miserably in almost all parameters when compared to six developed and developing nations such as the US and UK, China, Brazil, and Singapore, reveals a newly released study. The most telling finding was that despite having 10.8 lakh beds—the second highest among all the countries surveyed—there is less than one bed for every 1,000 people. The joint study was conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI) and HOSMAC, a hospital planning and management consultancy firm. The UK tops the bed-patient ratio parameter with 3.9 beds higher than WHO's norm of three beds per 1,000 people. India's burgeoning population, say industry experts, cannot be used as an excuse given that China has 40.63 lakh beds, and meets WHO's norms.

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Facts & Figures

The central government, through the main council of the Ministry of Health and Family Welfare and various committee recommendations, has shaped health policy and planning in India. It is being implemented through one of India’s five-year plans with a programmatic approach. The central government designs national programs and the states’ governments are required to implement them. However, there is a clear demarcation between the central and state governments’ provision of health services.

The states fully finance hospital services and primary healthcare facilities. Meanwhile, family welfare programs are fully financed by the central government. And national disease control programs are funded on a 50:50 sharing arrangement. However, in many cases, the states’ contribution turns out to be about 75 percent, and the states have to bear all administrative costs, including staff salaries. Out of the total expenditure on medical education and research, the central government’s share is a little over 40 percent. Thus, by and large, the states fully finance all curative care services.

Regarding private spending on healthcare, the National Health Accounts matrix reveals that 71 percent of the health budget is contributed by the private sector, of which households alone spend 68.8 percent. This is because the government’s health sector policies encourage the growth of the private healthcare sector, especially for curative services, by investing resources in medical education, providing subsidies and tax exemptions, and offering soft loans to set up hospitals. So even though public sector spending on healthcare is less, it has a major role in terms of planning, regulating, and shaping the delivery of health services in the country. Such public provisioning is considered essential to achieve equity and to reduce the gaps associated with health. As a result, the public health system has grown over time across the country with 137,311 subcenters (mainly dispensaries manned by paramedics), 22,842 PHCs (Primary Health Centers), 3,043 CHCs (Community Health Centers), 4,048 hospitals, and a workforce of 345,514 (statistics from 2001-02). There is a strong case to markedly increase public sector spending on health, as stated in the National Health Policy 2002 and the National Common Minimum Program (CMP) 2004

In addition to this, the Ministry of Health and Family Welfare implements certain schemes itself, such as the Central Government Health Scheme (CGHS) and national disease-control programs, through the states’ governments. A large part of the Ministry’s budget is passed on as grants-in-aid to states for implementing various national health programs. Even though the size of the central health budget has grown considerably, transfers to states as a proportion of the total budget of the Ministry has declined from nearly 57 percent to 44 percent. This shows the increasing role that the central government has been assuming in the delivery of health services.

To overcome the country’s inequity, inequality, and budget deficits, the government has initiated a mix of mandatory social health insurances, voluntary private health insurances, and community-based health insurances. However, social security for medical emergencies is not new to India. It is a common practice for villagers to take a piruvu (collection) to support a household with a sick patient. Health insurance as we know it today was revised in 1972, when the insurance industry was nationalized. Private and foreign entrepreneurs were allowed to enter the market with the enactment of the Insurance Regulatory and Development Act (IRDA) in 1999. The penetration of health insurance in India has been low. It is estimated that only about four to six percent of all Indian citizens are covered under any form of health insurance. In terms of the market share, the size of the commercial insurance market is barely two percent of the total health expenditures in the country. Thus, health insurance is really a minor player in the health ecosystem.
“For the majority of Indian citizens, the public health system is out of reach due to distance, lack of money, or lack of confi dence in the system.
“In developing countries like India, healthcare has been a neglected issue.