Methods and Measurement of Primary, Secondary and Tertiary Healthcare Expenditures in India During 2013–2014 to 2016–2017

 Indian Journal of Human Development


Health care is broadly characterised by three types of health care services—primary, secondary and tertiary (PST) care. Primary care is the first level of contact with the health system for individuals with different health care needs. It addresses the key health concerns in the community by providing promotive, preventive, curative, and rehabilitative services. It helps reduce morbidity and mortality at lower costs and lessen the need for secondary and tertiary care. Absence of financial and physical access and poor-quality services in public sector often led patients to use private sector, informal care (including pharmacies), or higher-level facilities as the first point of contact.

National Health Policy (NHP 2017) recommended comprehensive primary health care on the lines of universal health coverage and called for two-third or more of health care resources to be spent on primary care. The Government of India (GOI) in September 2018 announced through the Ayushman Bharat scheme, comprehensive primary health care to be provided closer to the communities through 150,000 Health and Wellness Centres to be operationalised by the year 2022. Secondary and tertiary care services are to be provided through the Pradhan Mantri Jan Arogya Yojana (PM-JAY) of the scheme. In this context, knowing and improving the investments flowing into PST care become imperative.

Investments on PST must be analysed in the overall context and composition of health spending in India. The total health spending in India was very low at 3.8% of GDP in 2016–2017 as compared to 6.6% at global level and 5.3% for low-middle-income countries. Government spending in total health expenditures was at 32.4% as compared to 60% at global level and 44% for lower middle-income countries. Private out-of-pocket expenditures (OOPE) share in total health expenditures, though declined from 64.2% in 2013–2014, continued to be high at 58.7% in 2016–2017, and was much higher than 39% of total health spending for low-middle-income countries. Of the total health expenditures, 92.8% were current health expenditures (CHE) and rest 7.2% were capital formation by the government.

There is an ongoing debate to define and estimate PST care expenditures. World Health Organization (WHO) uses health care functions (which refers to the purpose of activities or services offered) to estimate current primary care expenditures. India defined PST expenditures in National Health Accounts (NHA) 2013–2014 and uses the cross classification of functions and providers to estimate PST care expenditures for government, private and combined.

The objectives of the paper are (a) to present the India NHA methodology for defining PST and how it compares with WHO functional classification for PST (b) analyse the trends of the PST expenditures as shares of total CHE and compare the results for primary healthcare expenditures in India with similar estimates in low-middle-income countries; (c) analyse the trends of PST expenditures by providers and functions for 2014–2015 to 2016–2017; and (d) estimate the government investments required to reach the policy goals outlined in NHP 2017 and High-level Meeting on Universal Health Coverage, and suggest areas where the government investments in primary health care need to be focused.

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