NHM helped increase central government spending on healthcare, CSEP research says
The National Health Mission (NHM) has helped increase healthcare expenditure by the central government compared to overall expenditure, according to a working paper by the Center for Social and Economic Progress (CSEP).
Researchers say that the NHM had a clear impact on healthcare expenditure in its initial phase. “From 2000-01 to 2004-05, the pace of central health expenditure grew slower compared to total expenditure (center plus states), a trend that reversed after the launch of NHM,” it said.
The launch of the NHM was accompanied by an increasing role of central government in health financing, as evidenced by the fact that per capita health expenditure in the Union increased annually in the early years of the NHM grew faster than total expenditure.
“The per capita healthcare expenditure of the union government has grown at an annual rate of 12.4 percent between 2005-2006 (the year of the launch of NHM) and 2019-2020, compared to total expenditure, which grew at 10.3 percent ,” the study said.
Researchers add that this was largely due to the launch and subsequent expansion of spending on NHM in its first eight years.
Growth in per capita health care expenditures relative to total expenditures subsequently slowed from 2010-2011 to 2014-2015, but still significantly outperformed total expenditures over the next five years.
“Between 2015-16 and 2019-20, the per capita healthcare expenditure of the union government increased by 13 per cent annually, compared to a 7.5 per cent growth in total government expenditure,” the study said.
The study also adds that NHM has helped reverse the downward trend in health expenditure by states by providing them with non-wage resources in the context of their own low revenues.
To effectively gain a deeper understanding of fiscal federal dynamics in health care financing, the study identified six states with different health care pathways. These include non-high-focus states under NHM, such as Tamil Nadu, West Bengal and Haryana, and high-focus states of Rajasthan, Meghalaya and Madhya Pradesh.
“After the launch of the program in 2005, average annual health care spending for six sample states increased more rapidly by 17 percent compared to total spending, which grew 15 percent between 2005-2006 and 2013-2014,” the paper said. .
“The share of healthcare in the states’ total expenditure has increased from 3.04 per cent in 2004-05 to 5.3 per cent in 2020-21,” the study said.
First print: May 22, 2024 | 10:23 PM IST