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India’s economy rides on health of its people. Budget 2021 must acknowledge that

Health research must be funded more, especially in the area of implementation research to ensure that more money for health translates to more health for the money.

Written by K Srinath Reddy |
Updated: January 29, 2021 9:06:24 am
Nurses prepare for a round of Covid-19 vaccination at Civil Hospital in Thane. (Express Photo: Deepak Joshi)

The Union Budget of 2021 is interposed between a year when COVID-19 drove its viral spikes into many cells of our economy and a year when all of India will be joyfully celebrating 75 years of independent nationhood. The budget should reflect hope for the future as we look ahead with optimism, tempered by the sobriety of lessons learnt from the year gone by. Health and economy were closely intertwined in our priorities last year. They should remain so even when the pandemic abates. For, to forsake health would be a grave error for the economy. Not only because a health crisis can derail the economy, but also from the recognition that investments in health can boost economic growth.

The budget must, therefore, provide higher allocations to health. If we have to move towards the already announced goal of raising public expenditure on health to 2.5 per cent of India’s GDP by 2025, from the present 1.3 per cent, this year’s budget must reflect that commitment through a 20-25 per cent increase in the overall allocation to health in comparison to the past year. The years to follow should keep up the momentum to reach the 2.5 per cent target which is minimalist in any case. Even if the total expenditure on health stagnates at 5 per cent of the GDP, a public financing level of 2.5 per cent will represent only 50 per cent. We will still be left with high out-of-pocket expenditure, as coverage from employer paid and privately purchased insurance is low. Insurance paid through mandatory salary deductions (“labour taxes”) is not a feasible option in a country where much of the workforce is in the informal sector. Writing in Health Affairs (May 2020), eight leading global health economists made a “case against labour-tax financed social health insurance for low and middle income countries”.

If we are to achieve the recommendation by the World Bank and the World Health Organisation that programmes of universal health coverage should aim to reduce out-of-pocket expenditure to 15-20 per cent, we need to do much better in terms of public financing of health. Our out-of-pocket expenditure on health is still around 58 per cent. Ideally, total health expenditure should rise but with public financing contributing the largest share. The states, too, must step up their allocations for health but the pace will be set by the Centre.

Within the health budget, allocations must meet both the urgent priorities of the pandemic response and the longer term need to build a stronger health system that can provide a broad range of health services with an assurance of sustained efficiency and equity. A convergence of these priorities would be best reflected in increased allocations for both rural and urban primary care. From health literacy for COVID-appropriate behaviour, early case detection and contact tracing to home care for most infected persons and chronic care for long-term effects of the virus, primary care services will need to be strengthened for an efficient pandemic response. The Urban Health Mission, which lies in cold storage, must be activated to capably stall transmission of infection and also effectively detect and care for co-morbidities which enhance its risk. Primary healthcare serves the whole population, offers the largest package of services and is cost-optimising both in low-cost services and preventing the need for high-cost care of avertable complications. The budget must reflect the commitment made by the National Health Mission to allocate two-thirds of health financing to primary care.

Financing mechanisms must enable comprehensive, continuous and connected care for many chronic diseases, with efficient, bidirectional linkages between primary, secondary and tertiary levels of care. The Pradhan Mantri Jan Arogya Yojana must link with the National Health Mission to provide coverage for out-patient care, including essential drugs and diagnostics, while expanding coverage to cover the “missing middle” of our population who too are vulnerable to health shocks. Elderly care must receive greater attention, as must disability services and mental health. Higher taxes on all varieties of tobacco products, ultra-processed foods and beverages, alcohol and luxury vehicles can raise more revenue to expand the general revenue pool, permitting higher allocation to health from the general budget even if earmarked taxes are an anathema to finance ministries.

Even as we welcome evidence of an ebbing epidemic, emergence of more infectious mutants still poses a threat. Surveillance systems and laboratory capacity must receive support, including One Health eco-surveillance that traces microbial migration from wildlife to veterinary and human populations. Upgrading of district and medical college hospitals must also be accorded high priority. Expansion of a multi-layered, multi-skilled health workforce, through investments in training institutions which are widely distributed across the country, must be financed in partnership with the states. We cannot cope with a public health emergency and simultaneously provide all other needed health services if we stay short in size and skills in most categories of our health workforce. Multi-disciplinary public health expertise, needed for design and delivery of health programmes, must be fostered by supporting and expanding training institutions and creating public health cadres at the Centre and states. The recommendation of the National Health Policy 2017, for creation of such cadres, will be earnestly implemented only when catalysed through centrally financed mechanisms and guidelines.

Health research must be funded more, especially in the area of implementation research to ensure that more money for health translates to more health for the money. Health technologies need to be incentivised to enhance the effectiveness and equity of health services, through appropriate and affordable innovations. “Make In India” must support domestic pharmaceutical, vaccine and medical equipment makers for stepping up quantity and quality.

The funding provided to health in 2020, including the additional allocations for COVID-19 response, was only a priming shot. A more potent booster shot of financial allocation is needed for the health system to deliver sustained benefits of better health and brighter economy to the nation. The nation’s economy rides on the health of its people. That, in turn, depends on how much the government values health. The budget will tell.

This article first appeared in the print edition on January 29, 2021 under the title ‘A booster shot for health’. The writer, a cardiologist and epidemiologist, is president, Public Health Foundation of India (PHFI). He is author of Make Health in India: Reaching a Billion Plus. Views are personal

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