JANUARY

The Indian Health Care System, 2015
Mrigesh Bhatia
What is the role of government?
The constitution of India considers the “right to life” to be fundamental and obliges government to ensure the
“right to health” for all, without any discrimination (MOH, 2009; Thomas, 2009). More recently, the National
Health Bill, introduced in 2009, views health care as a public good and health as a human right of every
individual (MOH, 2009). The goal of India’s national health policy is universal access to good-quality health care
services without financial hardship (MOH, 2014).
Under the constitution, areas of public policy are divided between the central and state governments. States
are responsible for organizing and delivering health services to their population. The central government,
meanwhile, plays an important role with respect to international treaties, medical education, prevention of food
adulteration, quality control in drug manufacturing, national disease control, and family planning programs.
It also carries out a stewardship role with respect to policymaking, developing the regulatory framework, and
supporting the work of the states.
At the local level, Panchayati Raj institutions (PRIs)—a decentralized system of local governance formalized
in 1992—and their elected representatives participate in the functioning of district and subdistrict institutions
through various committees (MOH, 2014).
Who is covered and how is insurance financed?
Publicly financed health insurance: In spite of strong economic growth, total expenditures on health represent
4.1 percent of GDP (MOH, 2014). Of total health expenditures, 71.6 percent were financed by private funds
and 26.7 percent by public funds, including central, state, and local government bodies and external flows
(CBHI, 2013). Per capita health spending has risen from USD21 in 2000 to USD44 in 2009 (WHO, 2015). The
12th five-year plan (2012–17) aims to increase public spending to 2 percent of GDP (MOH, 2011).
In principle, coverage of health services is universal and available to all citizens under the tax-financed public
system. In the draft national policy document, it is proposed that tax-based financing remain the major source
of funding for the 70 percent of the population who are poor. Free primary care provided by the public sector,
supplemented by strategic purchase of secondary and tertiary care services from both the public and private
sectors, would be the main financing approach (MOH, 2014).
However, in practice, severe bottlenecks in accessing government health care services compel households to
seek private care, often resulting in high out-of-pocket payments.
In addition to public health facilities, a number of health insurance schemes currently exist in India. The central
government’s health services for civil servants and state-level employee insurance for formal workers are
mandatory schemes. More recently, a number of social health initiatives, like Rashtriya Swasthya Bima Yojana
(RSBY), have been launched to broaden health care access, mainly for the poor. These have enrolled 36 million
people, expanding coverage from 5 percent to 15 percent over a six-year period (RSBY, 2015). With proposed
expansion of the RSBY scheme to include rickshaw and taxi drivers, rag pickers, sanitation workers, domestic
workers, street vendors, building and construction workers, and beedi (tobacco) workers, coverage under the
scheme is expected to increase further (RSBY, 2015). Given these trends, a World Bank study projects that by
2015, about half the country’s population could be covered with some form of health insurance (Forgia and
Nagpal, 2012).
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