Increase of government spending on health from around 1% to under 2% of GDP in the 12th Five Year Plan can create an affordable health system by pursuing two independent strategies to achieve universal health care —strengthening the public health system, and building a government sponsored health insurance system
The 12th Five Year Plan and its promise of increased government spending on health from around 1% to under 2% of GDP is seen by many that the government might at last be serious about the nation’s health. Yet, as recent debates on the Health Plan indicate, it is not clear where these additional funds should be invested. Indeed, the government appears to be pursuing two independent strategies to achieve universal health care—strengthening the public health system, and building a government sponsored health insurance system. Given the levels of government spending of health, both strategies cannot be adequately funded. Nor do these two paths necessarily complement each other. There is a pressing need for a national strategy that harmonises these competing paths and enables the efficient use of our country’s scarce health resources.
The idea of universal health care is not new in India. The Bhore Committee report (1946) inspired the creation of a vast network of government funded and staffed clinics and hospitals through which all Indians could have access to affordable health services. That this system failed to deliver on its promise is well known—it was underfunded, under supplied and under staffed.
In the past decade, there has been a renewed effort to rejuvenate the public sector health system, particularly at the primary care level. This effort was signaled by the launch of the National Rural Health Mission (NRHM) in 2005, which till date, has invested around R43,700 crore in strengthening the public system. With the eminent launch of the National Urban Health Mission, substantially more government funding can be expected to flow into health. More recently, the High Level Expert Group (HLEG) commissioned by the Planning Commission recommended that the government spend upto 3% of GDP on strengthening the public sector health system.
In parallel, central and state governments have been systematically building a health insurance system. The growth of government health insurance has brought ‘new’ funds into the health sector. The Rajiv Aarogyasri Scheme (RAS) which debuted in 2007 in Andhra Pradesh, spawned similar schemes in several other states (Tamil Nadu, Karnataka, Maharashtra, and Gujarat (planning). The central government too has