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Why Governments need to spend more on Healthcare Infrastructure?

June 16, 2020 - by Parul Saini, Webmedy team

Are Governments around the globe spending enough on healthcare infrastructure? Global pandemics like COVID-19 have brought to the forefront the need for governments to spend substantially on building healthcare infrastructure.

Healthcare is a basic Responsibility of Government

While it is vitally important to defend the country against border nations against hostile aggression and hence the need to spend suitably on defense, it is vitally important to be able to defend the nation's population against internal health outbreaks and pandemics. Unfortunately, spending on healthcare compared to other areas like defense and business etc is astonishingly very low for most of the countries. COVID-19 pandemic has exposed the weakness of healthcare infrastructure in many countries, with an acute shortage of hospital beds, staff, equipment, and overall capacity. Isn't it the responsibility of the state to provide healthcare to its citizen in events of large scale outbreaks?

Why Governments do not spend enough on healthcare?

Most governments do not spend enough on healthcare and its infrastructure because of purely financial reasons. Spending more on business growth helps governments to generate more revenue because a thriving economy will pay back through taxes. Whereas healthcare is seen mostly by governments as an area of spending with little or no return.

Stimulus responses of governments for COVID-19 flawed?

Most of the governments around the world are increasing expenditure and providing financial stimulus packages for dealing with the COVID-19 devastation to the economy. But what if COVID-19 becomes a part of our lives and we have to live with it in the future. Or we see similar pandemics in the coming years? Would it not be wise to spend substantially on healthcare and its infrastructure instead? This could atleast ensure that we can deal with healthcare situaltions and still go about doing our businesses as usual. Surprisingly, not much is being spent on healthcare in response to COVID-19. With trillions of dollars going as business incentives and other reliefs, not enough is being spent on building capacity of healthcare. Infact, most of the medical staff dealing with COVID-19 around the world is still complaining about critical shortages of equipments like ventilators and personal protective equipment (PPE).

Situation in India

Out of pocket expense in healthcare in India is one of the highest in the world. 65% of healthcare cost is being paid by patients themselves. The government's health expenditure stood at 30.6% of the total health expense. Patients end up paying out of pocket on drugs, bed charges, diagnostic tests, medications, and commodities like vitamin supplements. There is a lack of hospital beds that also points to shocking congestion in public clinics where one can see patients resting in the hallways in search of a place. Patients have to deal with high cost of medications and have to shell out for all kinds of extra costs while they are being treated 'free' in public hospitals.

The horrible state of the rural health sector has previously been shown in the Economic Survey 2018-19. About 60% of the Primary Health Centres have only 1 doctor while 5% have none. Only 20% meet the Indian Public Health standard pattern. There is an urgent shortage of human resources in peripheral health institutions. Tertiary healthcare below the National Urban Health Mission also noticed a big dip of Rs. 200 crore in allocation in Budget 2019-20 while the allocation for up-gradation of 75 district hospitals to medical institutes has gone up to Rs. 800 crore.

While government investment was 1.18 % of the total GDP in FY 2016, Out of Pocket Expense was 2.33 % of the GDP that year as per NHA estimations. With such low spending on healthcare, how does the government wish for a rise in labour productivity? The health of the labour force is necessary and is immediately linked to its productivity. With the focus on "Make in India" and "Vocal for Local" the condition of the labour force is vital.

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