• Spending overview
• Policy overview
• Diseases overview

Spending overview

India spent an estimated 5% of GDP on healthcare in 2009. This is more than neighbouring Pakistan and China but far less than the G7 average of around 12%. Over 80% of healthcare spending is out of pocket. Only one-tenth of the population has health insurance, and spending on healthcare is a major cause of indebtedness. Several social insurance systems exist, such as the employee state insurance for industrial workers and the central government's health scheme for government employees, but these cover a tiny proportion of the population and account for only about 5% of government expenditure on health. Public spending on healthcare will continue to rise; the budget for fiscal year 2009/10 (April-March) increased the expenditure budget of the Ministry of Health and Family Welfare by 22% year on year. However, this represented just 2.3% of total planned central government expenditure.

The private sector accounts for more than three-quarters of total health expenditure, an extremely high proportion by international standards. The government is keen to continue to encourage this trend; the National Health Policy 2002, which is still in effect, envisages an overall increase in health spending to 6% of GDP by 2010. However, only one-third of this increase would consist of public health investment. Private-sector investment in healthcare is surging. Private hospitals are also realising economies of scale by targeting specific services such as maternity care, and making heavy use of the sort of information technology that many Western countries are struggling to introduce.

Policy overview

The current Indian National Congress-led government has made the provision and availability of primary healthcare to all one of several policy priorities. This could lead to higher annual spending in the future, although wide budget deficits at both national and state government levels will weigh against a significant increase in outlays in the short term. The main objective of government health policy is a basic one: to achieve an acceptable standard of health among the general population. The National Health Policy 2002 stresses the importance of developing primary care and public health measures, and supports a greater role for the private sector in widening the extent and coverage of care. Ongoing public health programmes include immunisation programmes, a tuberculosis control programme and an AIDS control programme.

Although hospitals have traditionally been the domain of the state or private trusts and charities, the new-found prosperity of many Indian households is spurring demand for high-quality medical care, transforming the healthcare-delivery sector into a profitable industry. Continued lack of investment in state-owned hospitals and the increasing incidence of so-called lifestyle diseases (such as heart disease, cancer and diabetes) that is accompanying rising incomes will ensure that the trend towards private healthcare intensifies. However, hospitals will face two significant challenges as they formulate plans to expand: the high cost of land in urban areas and a growing shortage of nursing staff. Although most hospitals are overcrowded and understaffed, a number of world-class facilities have sprung up in the past two decades in India's biggest cities, catering almost entirely to the rich. So well equipped and well staffed are these hospitals that India has become a leading destination for medical tourism.

Diseases overview

India has the second-largest population in the world, after China. Life expectancy has been improving, to an estimated 69.9 years in 2009, up from 57 years in 1990 and 37 years in the early 1950s. Malnourishment is a serious problem, reflecting widespread poverty, as are communicable diseases. Levels of infant and adult mortality and morbidity vary widely across states, partly reflecting the differing levels of resources available to state governments. The National Health Policy 2002 recognises that the prevalence of disease in India is unacceptably high and that the level of sanitation is unacceptably low. Rapid urbanisation is presenting further challenges. Pest-borne and infectious diseases will remain a problem and health services will also have to cope with an increase in the chronic and lifestyle-related conditions that are associated with rising incomes and greater longevity.

The National AIDS Control Organisation (NACO) estimates that over 2.5m people were infected with HIV/AIDS in 2007, a figure that is backed by the Joint UN Programme on HIV/AIDS (UNAIDS). This is less than one-half of the 2006 estimate of more than 5.7m people. The discrepancy came about because of the much higher incidence of HIV/AIDS in urban areas than in rural regions, and the fact that previous estimates were based on urban figures alone. Incidence also varies widely according to state. Nevertheless, on a global basis India is second only to South Africa in terms of the number of people living with the disease, and still faces great challenges in tackling the virus. Moreover, only 7% of those people have access to treatment.