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Analytical Essay on Health Care Reforms in India

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Health services and systems are crucial for the measurement of health outcomes (Reeves et al, 2015). Whatever health system a country adopts determines the level of citizen’s wellbeing. India had the Bhore Committee Report of1946, formally referred to as Report on the Health Survey and Development Committee (Bhaumik, 2013). This is the foundational spot from which India’s current health system and policy is premised. Their main goal is to have HCW employed by government and reduce private practitioners . As well as primary reason was to protect patients from socioeconomic forces (Dey & Mishra, 2014). However, the inefficiencies in and lack of quality of health care service delivery created an influx of private health care providers

The percentage of GDP : The GDP% spent on health in India has increased from 1.2% in 2013-2014 to an insignificant 1.4% (2017-2018) (MHFW, 2017) also government have increased total public health expenditure up to Rs 2.25 lakh crore in 2017-18. This is almost double from Rs 1.49 lakh crore in 2014-15 (MHFW, 2017). India makes out-of-pocket payments to private institutions to be 75% of total health care expenditure and only one fifth of the healthcare expenditure is sourced from government. This is verified by the small % of GDP spent on healthcare by government (Deolalikar et al, 2015). Thus households contribute 71% of funds, state, 13.3% and national, 8.2% (See succeeding figure)

Sources of Financing: Estimation of Public Expenditure-source MHFW, 2017. As already articulated, Public expenditure is smaller than private. Contribution of government hospitals is only 3.0% and private hospital is 22.0%. Major expense is done for medicines at 52.0% (MHFW, 2017). National Immunisation coverage was only 44%. Three-quarters of health spending is paid privately from out-of-pocket expenditure as more money has been paid for medication

Health expenditure: India’s public spending on health is about 1.1 percent of GDP. The central government accounts for about a quarter of all public spending on health. The state government spent between 50-75% for curative services in hospitals in 1999-2000 (Deolalikar, Jasmison, Jha, & Laxminarayan, 2015).

Economic levers in India: Government could raise additional resources by imposing taxes on harmful products. Making compulsory rules to work in public hospital for 2-3 years after completion of medical study in public universal. (Duggal,2007).

Challenges In Healthcare Sector: The healthcare industry faces major challenges owing to the changing demographics of the country, the poor state of the public infrastructure, lack of financial resources, paucity of human capital and poor governance.

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Firstly, demographics of India consist of much age Group but majorly are youth who suffers maximum lifestyle diseases. So, in India health care system should be focused more diversely on the basis of age group. Secondly, privatisation of health sector: health system is 80% under private sector which is expensive as well and 20% under public sector. Also it is considered who pays more will get better health care service which is creating burden on middle class families. Thirdly, health Infrastructure: India is a developing country and its major population is under poverty and middle class. So, government have to invest big capital and man power in health sector to improve the quality and access, where they already have shortage. Second lastly, human capital crunch: healthcare sector requires highly skilled human resources from doctors to other medical support staff like nurses, lab technicians, pharmacists, etc. But, majority of the healthcare professionals happen to be concentrated in urban areas where consumers have higher paying power, leaving rural areas underserved. Lastly, health insurance: India’s health insurance model excludes a large part of the population with over three quarters of the population having no health insurance

Cost benefit analysis (CBA) is a method used for the evaluation of public projects. It helps to calculate all potential gains and losses of proposed public projects (Nas, 2016).There are two types of cost benefits analysis:

  1. Ex ante CBA which is used before the project is started.
  2. Ex post CBA which is conducted at the end of project.

Over 80 percent of Indian doctors and 70 percent of nurses and midwives opt to join the private sector, which offers a more conducive work environment.The most disconcerting in India is high cost of medicines. An overwhelming 70 percent of healthcare expenses in India are paid by Indian patients out of their own pockets, one of the highest rates in the world (Basu, et al., 2015).

Cost-effectiveness analysis (CEA) is economic analysis tool that use to compares the relative costs and outcomes (effects) of different medical care is offered. Its goal is to analysis to determine if the value of an intervention justifies its cost (U.S. departments of veterans Affairs ,N.D)

The private health care industry is booming, drawing staff away from already chronically under-resourced hospitals. The country has promoted itself as a health care tourism destination, and the value of the private medical sector is expected to triple to $133 billion by 2020.

Increasing the number of physicians, specialists, staff nurses, as well as ANMs, but also gave importance to increasing the production capacity of medical colleges at graduate and post graduate levels. Physical infrastructure was enhanced by creating more health centers, newborn care units and renovating existing centers, which increased the capacity of health systems to treat more mothers and children. (Boardman, et al., 2017).


India is one of the emerging developing country with billions of population. The private medical care system is very good and affordable. The government is also trying to provide very good medical health care services but due to uneducated people and politics the needy people fails to get such facilities. The government of India should make the policies and plans for the delivery of medical health services in rural areas and to the poor people. Furthermore, the medicine for the breakdown disease should be provided by the government in free of cost.


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  2. Basu, S., Bendavid, E., & Sood, N. (2015). Health and economic implications of national treatment coverage for cardiovascular disease in india: cost-effectiveness analysis. Circulation: Cardiovascular Quality and Outcomes, 8(6), 541-551.
  3. Boardman, A. E., Greenberg, D. H., Vining, A. R., & Weimer, D. L. (2017). Cost-benefit analysis: concepts and practice. Cambridge University Press.
  4. Cotlear, D., Nagpal, S., Tandon, A., Cortez, R., & Smith, O. (2015). Going universal: How 24 developing countries are implementing universal health coverage reforms from the bottom up. Washington, DC: World Bank.
  5. Deolalikar, A., D. Jamison, P. Jha, R. Laxminarayan, (2015). “Financing Health Improvements in India”, Health Affairs. Jul-Aug; 27(4):978-90.
  6. Duggal, R. (2007). Healthcare in india: Changing the financing strategy. Social Policy & Administration, 41(4), 386-394.
  7. India’s Ailing Health Sector The Diplomat
  9. Maitra, P., & Mani, S. (2017). Learning and earning: Evidence from a randomized evaluation in India. Labour Economics, 45, 116-130.
  10. Nas, T. F. (2016). Cost-benefit analysis: Theory and application. Lexington Books.
  11. Prinja, S., Bahuguna, P., Mohan, P., Mazumder, S., Taneja, S., Bhandari, N., … & Kumar, R. (2016). Cost effectiveness of implementing integrated management of neonatal and childhood illnesses program in district Faridabad, India. PloS one, 11(1), e0145043.
  12. Ramireddy, J. K., Sundaram, D. S., & Chacko, R. K. (2017). Cost Analysis of Oral Cancer Treatment in a Tertiary Care Referral Center in India. Asian Pacific Journal of Cancer Biology, 2(1), 17-21.
  13. Singh, B. B., Kostoulas, P., Gill, J. P., & Dhand, N. K. (2018). Cost-benefit analysis of intervention policies for prevention and control of brucellosis in India. PLoS neglected tropical diseases, 12(5), e0006488.
  14. Verguet, S., Kim, J. J., & Jamison, D. T. (2016). Extended cost-effectiveness analysis for health policy assessment: a tutorial. Pharmacoeconomics, 34(9), 913-923.

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