The Union Ministry of Health and Family Welfare released the National Health Accounts (NHA) estimates for India for the financial year 2022-23. The report highlights a decade-long transition in the country’s healthcare financing, driven by a steady rise in public healthcare investments. According to the data, Government Health Expenditure (GHE) as a percentage of Gross Domestic Product (GDP) increased from 1.15% in 2013-14 to 1.43% in 2022-23. This rise in public financing corresponds with a sharp decline in Out-of-Pocket Expenditure (OOPE) by households, reflecting improved financial protection and a structural shift toward universal health coverage.
Understanding National Health Accounts
Methodology and Framework
The National Health Accounts estimates utilize the National Health Accounts Guidelines for India, 2016. This framework is based on the System of Health Accounts 2011 (SHA 2011), an international standard developed by the World Health Organization (WHO), the Organisation for Economic Co-operation and Development (OECD), and Eurostat. The system tracks the flow of health funds from their sources to their final destinations, analyzing who finances healthcare, who manages the funds, and what types of services are consumed.
Core Components of Health Expenditure
National Health Accounts classify healthcare spending into three main aggregates:
- Total Health Expenditure (THE): The entire amount spent on healthcare within the country by both public and private sources, including capital expenditure on health infrastructure.
- Current Health Expenditure (CHE): The operational spending on healthcare goods and services consumed during the reference year, excluding long-term capital investments like building hospitals.
- Government Health Expenditure (GHE): The sum of health spending by the Union Government, State Governments, Union Territory administrations, local bodies, and autonomous public entities.
Key Findings of NHA Estimates 2022-23
Growth in Government Health Spending
Government Health Expenditure as a share of Total Health Expenditure grew from 28.6% in 2013-14 to 41.7% in 2022-23. In per capita terms, government spending on health grew from ₹1,042 to ₹3,121 during the same period. This indicates a tripling of public funds dedicated to the health of each citizen over a ten-year span.
Decline in Out-of-Pocket Expenditure
Out-of-Pocket Expenditure refers to the direct payments made by individuals to healthcare providers at the time of service, without reimbursement.
- Share in Total Expenditure: OOPE dropped from 64.2% of Total Health Expenditure in 2013-14 to 43.4% in 2022-23.
- Share in Gross Domestic Product: As a percentage of India’s GDP, OOPE declined from 2.58% in 2013-14 to 1.49% in 2022-23.
- Per Capita Shift: Per capita OOPE fell from ₹2,336 in 2013-14 to ₹3,243 in 2022-23, growing at a much slower rate than public health spending.
Rise in Social Security and Insurance Spend
Social security expenditure on health includes government-funded health insurance schemes, medical reimbursements for public employees, and social health insurance programs like the Employees’ State Insurance (ESI). The share of social security expenditure in Total Health Expenditure rose from 6% in 2013-14 to 10% in 2022-23. Concurrently, private health insurance expenditures grew from 3.9% to 8.4% of Total Health Expenditure over the decade.
Statistical Overview of Health Financing
The table below summarizes the shifting indicators of healthcare expenditure in India between 2013-14 and 2022-23.
| Healthcare Financing Indicator | FY 2013-14 | FY 2022-23 |
| Government Health Expenditure (GHE) as % of GDP | 1.15% | 1.43% |
| GHE as % of Total Health Expenditure (THE) | 28.6% | 41.7% |
| Per Capita Government Health Expenditure (in ₹) | 1,042 | 3,121 |
| Out-of-Pocket Expenditure (OOPE) as % of THE | 64.2% | 43.4% |
| OOPE as % of GDP | 2.58% | 1.49% |
| Social Security Expenditure as % of THE | 6.0% | 10.0% |
| Private Health Insurance Expenditure as % of THE | 3.9% | 8.4% |
Institutional Structure of Health Spending
Share of Union and State Governments
Healthcare is primarily managed by the states under the constitutional framework. State governments account for the larger share of Government Health Expenditure, contributing approximately 60% to 65% of the total public health spend. The Union Government contributes the remaining 35% to 40%, which includes funding for Central Sector Schemes and Centrally Sponsored Schemes.
Primary, Secondary, and Tertiary Care Allocation
Current Health Expenditure is distributed across different levels of the healthcare delivery pyramid:
- Primary Care: Receives the highest share of public funds, accounting for nearly 49% of Government Health Expenditure. This includes sub-centers, primary health centers, and health and wellness centers.
- Secondary Care: Accounts for roughly 30% of public health spending, covering district hospitals and community health centers.
- Tertiary Care: Receives approximately 15% to 20% of the public budget, focusing on specialized medical colleges and advanced multi-specialty research institutes.
Policy Drivers Behind the Transition
Ayushman Bharat Pradhan Mantri Jan Arogya Yojana
Ayushman Bharat PM-JAY is a completely government-financed health insurance scheme that provides a cover of ₹5 lakh per family per year for secondary and tertiary care hospitalization. The scheme covers over 12 crore poor and vulnerable families, absorbing inpatient costs that previously fell under household out-of-pocket expenses.
National Health Mission and Infrastructure Expansion
The National Health Mission (NHM) supports state governments in strengthening rural and urban health systems. The establishment of Ayushman Arogya Mandirs (formerly Health and Wellness Centers) focuses on delivering comprehensive primary healthcare closer to communities. This decentralized access reduces the need for patients to travel to expensive private facilities for basic ailments.
Pradhan Mantri Bhartiya Janaushadhi Pariyojana
Medicines constitute the largest component of out-of-pocket health spending in India. The Jan Aushadhi scheme provides quality generic medicines through dedicated outlets at prices 50% to 90% lower than branded equivalents. This targeted intervention directly brings down pharmacy bills for households managing chronic and acute illnesses.
IASPOINT Booster Facts for UPSC
- National Health Policy 2017 Target: The policy aims to raise government health expenditure to 2.5% of India’s GDP by 2025.
- Constitutional Allocation: Health is a subject under the State List (List II) of the Seventh Schedule to the Constitution of India. However, items like population control, family planning, and medical education fall under the Concurrent List (List III).
- NHA Secretariat: The National Health Systems Resource Centre (NHSRC) functions as the National Health Accounts Secretariat, designated by the Ministry of Health and Family Welfare.
- Global Target for OOPE: The Sustainable Development Goals (SDG 3.8) target financial risk protection. The World Health Organization recommends that out-of-pocket expenditure should not exceed 15% to 20% of total health spending to prevent catastrophic health expenditures.
- External Funding: External developmental assistance or foreign aid for health in India has consistently declined, making up less than 1% of the Total Health Expenditure in the 2022-23 estimates.