Public Health Equity in India: Understanding Benefit Incidence of Public Health Expenditure

Context : A recent study titled “Benefit Incidence of Public Health Expenditure in India: Urban–Rural Equity Matters for Universal Health Coverage” has been published in the Journal of Health Management. It provides critical insights into how public health spending is distributed across different economic and geographic groups in India. The findings are crucial in the context of India’s pursuit of Universal Health Coverage (UHC) and improving the inclusiveness of health services.

What is Benefit Incidence Analysis (BIA)?

• Benefit Incidence Analysis (BIA) is a statistical tool used to assess how healthcare benefits from public spending are distributed among various socio-economic groups.

• It helps understand whether the benefits are pro-poor (favoring the poor) or pro-rich (favoring the rich).

• The study was led by researchers from the Indian Council of Medical Research (ICMR) and M.S. Ramaiah University of Applied Sciences, Bengaluru.

Data Used and Methodology

• The study used secondary data from the 75th round of the National Sample Survey (NSS) conducted between July 2017 and June 2018.

• This round focused on social consumption related to health.

• The analysis included parameters such as:

  • Disease burden

  • Out-of-pocket health expenditure

  • Non-utilisation of public health services

  • Inpatient and outpatient care usage

Importance of Benefit Incidence Analysis

• Helps evaluate the equity and efficiency of public health spending in reaching the intended beneficiaries.

• Reveals whether the government’s investments in healthcare are effectively supporting vulnerable populations.

• Offers data-driven insights to policymakers to design inclusive health policies for achieving Universal Health Coverage (UHC).

Status of Public Health Spending in India

• In 2016–2017, the total public health expenditure was ₹11,900.39 million.

• The share of public spending was 26.6%, while private spending accounted for 73.4%.

• Of the public health expenditure:

  • 66% was on inpatient care

  • 34% was on outpatient care

Equity in Public Health Spending

• Inpatient care spending is more pro-poor, meaning the economically weaker sections benefit more from government spending in this area.

• Outpatient care spending is more pro-rich, indicating that wealthier individuals tend to use public outpatient services more.

• When both inpatient and outpatient care are considered together, the distribution becomes more equitable.

Urban–Rural Disparities in Health Spending

• At the national level, there is an unequal distribution of public health spending between urban and rural populations.

• In rural areas, public spending on health is more pro-poor for both outpatient and inpatient services.

• In urban areas, public spending tends to be more pro-rich.

• Overall, non-poor sections are the main users of public health facilities for both types of care.

Reasons Behind Inequity in Public Health System

• Low Public Health Expenditure: Only 1.28% of India’s GDP, or approximately ₹1.58 trillion, is allocated to public health. This is among the lowest globally.

• Skewed Investment Pattern: Urban areas receive a larger share of health infrastructure investment, while rural areas remain underfunded.

• Quality of Services: Poor service quality deters people from using public health facilities for inpatient care.

• Reliability Concerns: Many urban and rural residents avoid public hospitals for outpatient care due to lack of trust in service reliability.

• Human Resource Gaps: Problems include staff absenteeism, lack of trained personnel, and inefficient administration, particularly in rural regions.

• Influence of Private Sector: Wealthier individuals in metropolitan areas prefer private care due to better service quality and limited health insurance coverage, even though it incurs high out-of-pocket expenses.

Way Forward

• Increase public health investment and ensure it is equitably allocated between urban and rural regions.

• Policymakers must use data from Benefit Incidence Analysis to identify gaps and better target the underprivileged.

• Regularly monitor trends and patterns in government health spending to align with the goals of Universal Health Coverage (UHC).

• Focus on improving infrastructure, human resources, and quality of care in rural and underserved regions to reduce disparities.