Kerala continues to have the highest per capita out-of-pocket expenditure (OOPE) on health in the country despite the fact that it is one of the States with the highest per capita government health expenditure (GHE) in 2019-20.
The State’s per capita OOPE rose from ₹6,772 in 2018-19 to ₹7,206 in 2019-20, even when its per capita GHE increased from ₹2,479 to ₹2,590, according to the key financial indicators in the latest National Health Accounts 2019-20, released recently.
NHA figures show that Kerala’s total expenditure on health (THE) in 2019-20 was ₹37,124 crore. However, out of this, ₹25,222 crore was spent from people’s own pockets (OOPE). As a percentage of the total health expenditure, Kerala’s OOPE was the second highest in the country at 67.9%, second only to Uttar Pradesh, which also has a high OOPE at 71.8% of its total health expenditure.
In comparison, neighbouring Tamil Nadu’s total health expenditure in 2019-20 was ₹35,001 crore, of which ₹15,455 crore was the OOPE. Per capita OOPE in that State is about ₹2,034. As a percentage of Gross State Domestic Product (GSDP), its total health expenditure stood at 2%, against Kerala’s 4.5%.
Among States, Kerala’s GHE accounted for 8% of the State’s general government expenditure in 2019-20, the highest in the country. When looked at as a percentage of the Gross State Domestic Product also, Kerala’s total expenditure on health in 2019-20 was about 4.5% of GSDP, of which 1.1% was the GHE.
Highest expenditure
Since 2013-14, when the first-ever NHA was released, these trends in Kerala have not changed. The State continues to have the highest expenditure on health, both public expenditure as well as money from people’s own pockets.
Despite increased government spending on health, the out-of-pocket expenditure on health in the State shows no indication of going down. The early demographic transition in the State, high health-seeking behaviour of the population and the spiralling of chronic non-communicable diseases have only served to keep the OOPE at a high.
However, health experts are hopeful that the State’s health spending trends could show a reversal in the NHA figures in the coming years.
“There is a lag period before long-term investments made in the health sector by the State will begin to show up. Since 2016, Kerala has majorly focused on improving primary care, through investments in infrastructure, facilities and human resources in health. The State saw an average increase in health budget by 30% during the pandemic when large-scale investments were made in improving facilities at secondary and tertiary care, especially Cath labs, ICUs, dialysis facilities and cancer care. The impact of these interventions as well as the health insurance schemes like AB-KASP and Medisep will significantly reduce private spending on health in the coming years,” Arun B. Nair, a health financing expert, said.
