Of each ₹100 of healthcare expenditure, ₹38 is spent on hospital stays, while medicines account for just ₹16.
Published Dec 08, 2024 | 12:09 PM ⚊ Updated Dec 08, 2024 | 1:16 PM
Of every ₹100 spent, ₹38 goes towards hospital stays.
India’s healthcare expenditure in 2021-22 reflects a complex and multi-faceted system where both government spending and private contributions play significant roles.
The Total Health Expenditure (THE) for India stood at ₹9.04 lakh crore, accounting for 3.83% of the country’s GDP.
This total includes money spent by the government, private entities, and external donors. Each Indian, on average, contributed ₹6,602 to healthcare, either through taxes, insurance premiums, or out-of-pocket payments.
The Current Health Expenditure (CHE), which constitutes ₹7.89 lakh crore, covers day-to-day healthcare costs such as doctor visits, hospital stays, and medicines. Think of CHE as the regular monthly expenses of a family—like food, rent, and utilities—that are necessary to maintain day-to-day health services.
In contrast, Capital Expenditure (₹1.14 lakh crore) is like saving up for big purchases such as buying a house or car, funding long-term investments like building new hospitals and purchasing advanced medical equipment.
The Government Health Expenditure (GHE) is a critical component of India’s health financing, with the government contributing ₹4.34 lakh crore to healthcare. This amount is split between the Union government (42%) and state governments (58%).
For example, the Centre spends ₹36,371 crore on public health programs like the National Health Mission, which includes rural healthcare and vaccination drives.
Despite this substantial government spending, Out-of-Pocket Expenditure (OOPE) remains a significant burden for Indian households.
In 2021-22, households spent ₹3.56 lakh crore on healthcare, which is 39.4% of THE, highlighting the financial strain on families who often pay for treatments, medicines, and hospitalizations not covered by insurance or government schemes.
Private Health Insurance contributes ₹66,975 crore (7.4% of THE) to healthcare funding, with private companies covering medical treatments for those who can afford premiums. This spending is particularly crucial for individuals seeking quicker or specialized care in private hospitals.
However, the largest contributor to healthcare services in India remains the government, covering about 40% of the total health expenditure, but households still shoulder a significant portion of the costs, contributing over 39% through OOPE.
Health service providers and expenditure
In India, healthcare services are mainly provided by private hospitals and pharmacies, which dominate spending. Private hospitals contribute ₹27 for every ₹100 spent on healthcare, while pharmacies contribute ₹19.
Government hospitals, offering affordable care, contribute ₹19 per ₹100. Other government providers, including Primary Health Centers (PHCs) and dispensaries, account for ₹7, while private clinics contribute ₹4.
Patient transport and emergency rescue services, including ambulances, add ₹4 per ₹100, and medical diagnostics, like blood tests and MRIs, contribute ₹3. Preventive care services, such as vaccination and health awareness programmes, make up ₹10.
Health system administration and financing providers, including insurance schemes, contribute ₹3, so do alternative medicine practitioners. Other retailers, such as those selling niche healthcare products, contribute just ₹0.1.
Spend: ₹1.50 lakh crore (19%) of CHE.
These include large public hospitals like AIIMS and state-run hospitals offering affordable or free healthcare.
Example: If you visit a government hospital for surgery or treatment, this spending comes from their resources.
Spend: ₹2.13 lakh crore (27%) of CHE.
These are private-sector hospitals and nursing homes, which often charge higher fees but offer quicker or specialised services.
Example: Going to a private hospital like Apollo or Fortis for a check-up or emergency care.
Spend: ₹56,477 crore (7%) of CHE.
Includes Primary Health Centers (PHCs), dispensaries, and family planning centers that cater to rural and underserved areas.
Example: Visiting a PHC in a village for vaccinations or maternity care.
Spend: ₹30,080 crore (4%) of CHE.
Includes private clinics and small, independent practices.
Example: Seeing a private general practitioner for a fever or cold.
Spend: ₹28,906 crore (4%) of CHE.
Includes ambulance services and rescue operations during emergencies.
Example: Calling an ambulance (like 108 services) during a medical emergency.
Spend: ₹26,238 crore (3%) of CHE.
Includes labs where tests like bloodwork, X-rays, or MRIs are done.
Example: Getting a blood test or an MRI scan at a diagnostic center.
Spend: ₹1.53 lakh crore (19%) of CHE.
These are retail medical stores where you buy medicines and over-the-counter drugs.
Example: Buying antibiotics or diabetes medication from a pharmacy like MedPlus.
8. Providers of preventive care
Spend: ₹82,325 crore (10%) of CHE.
Includes services like vaccination drives, health awareness programmes, and screenings to prevent diseases.
Example: Free polio vaccination camps or campaigns promoting hygiene.
Spend: ₹27,380 crore (3%) of CHE.
Covers administration costs for running the health system, like managing government health insurance schemes.
Example: Salaries of staff managing Ayushman Bharat or other insurance programs.
Spend: ₹21,759 crore (3%) of CHE.
Includes unclassified providers offering various health-related services.
Example: Ayurvedic or homeopathic practitioners.
Spend: ₹837 crore (0.1%) of CHE.
Includes minor or niche healthcare product retailers.
Example: Small shops selling herbal remedies or specific health equipment.
Contribution to CHE.
In India, healthcare expenditure is distributed across various categories. Inpatient Curative Care (hospital stays) takes the largest share, with ₹38 of every ₹100 spent. Day Curative Care contributes ₹1 of every ₹100 spent, while Outpatient Curative Care accounts for ₹15.
Patient Transportation services, including ambulances, make up ₹4 per ₹100. Laboratory and Imaging Services, which cover diagnostic tests, represent ₹3 for every ₹100 spent. Prescribed medicines account for ₹16 per ₹100, while Over-the-Counter (OTC) medicines make up ₹3.
Therapeutic Appliances and Medical Goods, such as medical devices, contribute ₹0.1 for every ₹100. Preventive care, focusing on disease prevention, takes ₹14 per ₹100. Governance and Financing Administration costs, including the management of health schemes, represent ₹3 of every ₹100 spent.
Other healthcare providers, including alternative medicine, contribute ₹3, while Pharmaceutical Expenditure (TPE) accounts for ₹31 per ₹100. Traditional, Complementary, and Alternative Medicine (TCAM) makes up for ₹4 of every ₹100 spent.
Inpatient curative care (hospital stays): ₹2.99 lakh crore (38% of CHE)
This is for patients admitted to hospitals for treatment (E.g., surgeries, childbirth, or severe illnesses).
Example: Someone hospitalised for appendicitis surgery or heart disease.
Day curative care: ₹7,327 crore (1% of CHE)
Covers medical procedures that don’t require an overnight stay.
Example: Chemotherapy sessions or minor surgeries.
Outpatient curative care: ₹1.21 lakh crore (15% of CHE)
Includes visits to doctors, specialists, or clinics for check-ups or treatments without being admitted.
Example: Visiting a doctor for a fever or routine health checks.
Patient transportation: ₹28,906 crore (4% of CHE)
Includes ambulance services or other forms of emergency transport.
Example: Calling an ambulance for a road accident victim.
Laboratory and imaging services: ₹26,238 crore (3% of CHE)
Covers diagnostic tests like blood tests, X-rays, or MRIs.
Example: A diabetic patient getting routine blood sugar tests.
Prescribed medicines: ₹1.26 lakh crore (16% of CHE)
These are doctor-prescribed drugs purchased from pharmacies.
Example: Antibiotics or insulin prescribed by a doctor.
Over-the-counter medicines: ₹25,458 crore (3% of CHE)
Medicines that don’t need a prescription, like cough syrups or painkillers.
Example: Buying paracetamol from a pharmacy.
Therapeutic appliances and medical goods: ₹837 crore (0.1% of CHE)
Includes medical devices like hearing aids, crutches, or eyeglasses.
Example: Purchasing a blood pressure monitor for home use.
Focused on preventing diseases, like vaccines, screenings, and health awareness programs.
Example: Vaccination drives for polio or COVID-19.
Governance and Financing Administration: ₹26,632 crore (3% of CHE)
Covers the costs of running healthcare systems, such as managing insurance schemes.
Example: Salaries for staff overseeing Ayushman Bharat.
Includes unclassified services and miscellaneous expenses.
Example: Services like physiotherapy or alternative healing practices.
Total spending on all medicines (prescription, OTC, and during hospital stays).
Example: Covers medicines prescribed for a hospitalized surgery patient or bought after a doctor’s visit.
Spending on non-mainstream systems like Ayurveda, Homeopathy, or Unani medicine.
Contributions to health expenditure
Primary Care (46% of CHE): First point of contact for patients, such as local clinics or PHCs.
Example: A child visiting a PHC for vaccinations.
Secondary Care (33% of CHE): Specialist care provided in district hospitals or nursing homes.
Example: A broken bone treated by an orthopaedic doctor.
Tertiary Care (16% of CHE): Advanced care in specialised hospitals.
Example: Heart surgery at AIIMS or a cancer treatment centre.
(Edited by Majnu Babu).
