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Status of healthcare sector in India

1. Public expenditure on health is merely 1.3% of GDP. National Health Policy 2017 set a target of 2.5% of GDP.

2. India has one-of-the highest level of Out-Of-Pocket Expenditures (OOPE) (around 65% of total health expenditure) contributing directly to the high incidence of catastrophic expenditures and poverty [As per Economic Survey 2020].

3. More than 80% of India’s population is uninsured [As per 71st round of NSSO].

4. Low doctor-population ratio of 0.7 per 1000 population, while WHO recommends at least 1 doctor per 1000 population.

5. Low nurse-population ratio of 1.7 per 1000. WHO recommends at least 3 nurses per 1000 population.

6. Rural-urban divide - the distribution of health workers is uneven between urban and rural areas. Rural areas with nearly 71% of India's population have only 36% of health workers.

7. Government medical colleges in the country produce 50 per cent of all doctors in India every year, but nearly 80 per cent of them work in the private sector.

8. Of all healthcare spending, only 7% is spent on preventive healthcare, while more than 80% is spent on treatment and cure.

Health & Law

Presently, health is under the state list of the 7th Schedule of the Indian Constitution.

Suggestions by 15th finance commission chairman NK Singh

  • shift to concurrent list under the constitution.

  • Increased government spending on health to 2.5% of GDP by 2025.

  • Primary health care should be a fundamental commitment of all states in particular and should be located at least two third of health spending.

  • Forming an all India Medical and Health Service.

  • A health sector specific development financial institution is much needed.

National Medical Commission

1. The government dissolved the MCI in 2018 and replaced it with a Board of Governors (BoG), which was chaired by a member of NITI Aayog.

2. IMC Act, 1956 stands repealed after the gazette notification, and has been replaced by The National Medical Commission Act that came into existence on 8th August 2019.

3. The NMC will function as the country’s top regulator of medical education.

4. It will have four separate autonomous boards for

- Undergraduate medical education.

- Postgraduate medical education.

- Medical assessment and rating.

- Ethics and medical registration.

5. The common final year Bachelor of Medicine and Bachelor of Surgery (MBBS) examination will now be known as the National Exit Test (NEXT), according to the new medical education structure under the NMC.

6. Besides, the National Eligibility and Entrance Test (NEET), NEXT will also be applicable to institutes of national importance such as all the All India Institutes of Medical Sciences (AIIMS) in a bid to ensure a common standard in the medical education sector in the country.

Significance and the need

1. The body seeks to regulate medical education and practice in India.

2. The body attempts to tackle two main things on quality and quantity: Corruption in medical education and shortage of medical professionals.

3. The body aims to overhaul the corrupt and inefficient Medical Council of India, which regulates medical education and practice and replace with National medical commission.

4. Over the years, Medical Council of India has been marred by several issues regarding its regulatory role, composition, allegations of corruption, and lack of accountability.

5. In 2009, the Yashpal Committee and the National Knowledge Commission recommended separating the regulation of medical education and medical practice.

Ayushman Bharat Scheme

Ayushman Bharat seeks to provide for Universal health coverage (UHC) by adopting two approaches Creation of

1. 1.5 lakh Health and Wellness centres (HWCs) and

2. Pradhan Mantri Jan Arogya Yojana (PM-JAY). 

The PM-JAY aims at providing a health insurance cover of Rs. 5 lakhs per family per year for secondary and tertiary care hospitalization.

- Coverage: 50 crore people who belong to bottom 40% of India’s population. Beneficiaries are identified through socio-economic caste census (SECC).


The Economic Survey 2020-21 has highlighted the achievements of PM-JAY by taking into account two important aspects:

  • PM-JAY was implemented in 2018. Hence, health indicators measured by National Family Health Surveys 4 (in 2015-16) and 5 (in 2019-20) can be compared to understand the impact of this scheme.

  • Some of the states such as West Bengal, Odisha, Telangana etc. are not implementing the PM-JAY scheme. Hence, to analyse the impact of PM-JAY scheme, the health outcomes in these states can be compared with rest of India.


  • Improvement in Health Insurance: The proportion of households covered under health insurance increased by 54 per cent from NFHS 4 to NFHS 5 in the states that adopted PMJAY. However, it decreased by 10 per cent in the states that did not adopt PMJAY.

  • Improvement in Health Outcomes (such as IMR, MMR, Access to Family Planning, Institutional births etc) in the states that have adopted PMJAY.

Concerns and Challenges

  • Low package rates: The government has published the rates that insurance companies would pay hospitals for around 1500 procedures covered under the scheme. These rates have become a sticking point for hospitals, which have criticised them as arbitrary and low.

  • Frauds: Under the scheme, though the card is issued to the head of the family, any number of family members may be enrolled to avail benefits under the programme. As such, people who do not meet the eligibility criteria for Ayushman Bharat may either get false poverty certificates to get a card themselves or claim false relationships to people who have these cards.

  • Politicization of Scheme: Some of the states such as West Bengal, Odisha, Telangana etc. have decided not to implement PM-JAY Scheme.

  • Budget allocation for PM-JAY has stagnated at Rs 6,400 crore. ( Needed amount- around Rs 1 lakh crores on annual basis)

  • Low Coverage of beneficiaries

  • Absence of Private healthcare facilities in backward states.

  • Unethical practices by private sector wherein hospitals are performing unnecessary procedures ( for example, Caesarean operation instead of normal delivery).

Primary healthcare


1. The existing primary health care model in the country is limited in scope. Even where there is a well-functioning public primary health centre, only services related to pregnancy care, limited childcare and certain services related to national health programmes are provided, which represent only 15 per cent of all morbidities for which people seek care.

2. The conversion of 150,000 sub centres into HWCs was announced in the budget speech in 2017 and was enshrined in the NHP, 2017.

3. Supply side deficiencies, poor management skills and lack of appropriate training and supportive supervision for health workers prevent delivery of the desired quality of health services.

4. A primary health care model for the growing urban population has not been conceptualized, notwithstanding a few assorted initiatives by some states.

5. Although the National Health Mission focuses on engaging communities through village health, nutrition and sanitation societies, health has not yet become a people’s movement.

6. Funding for health is inadequate, leading to low spending on primary care.

7. Citizens have to incur high out-of-pocket expenditure on primary health care, of which the largest expenditure is on drugs.

8. There is a shortage of adequately trained and motivated personnel.

Way Forward

1. Accelerate the establishment of a network of 150000 HWC

2. Enable mechanism for rapid scale up of institutional mechanism – established special National and state level task forces and command centres

3. Co-ordinate action for disease prevention and public health promotion and to address social determinants of health

4. Catalyse people’s participation for healthy India

5. Emphasize concurrent learning, operation research and innovation

Key learning for healthcare sector (as per Economic Survey)

1. Improve health infrastructure to effectively respond to future pandemics

2. Harness the full potential of telemedicine Via internet connectivity and health infrastructure to provide healthcare access in remote areas

3. Emphasis on National health mission in conjunction with Ayushman Bharat should continue

4. Increase in public spend from 1 % to 2.5-3 % of GDP can decrease out of pocket expenditure from 65 % to 30% of overall health care spend as envisaged in National health policy 2017

5. Bulk of healthcare in India is provided by private sector it is critical for policy maker to design policies that mitigate information asymmetry in healthcare which creates market failure and thereby renders and regulated private healthcare suboptimal

Way Forward

1. Mobilize public health action at multiple levels

  • Public funding on health should be increased to at least 2.5 per cent of GDP as envisaged in the National Health Policy, 2017.

  • Create an environment, through appropriate policy measures, that encourages healthy choices and behaviors. Make the practice of yoga a regular activity in all schools through certified instructors.

  • Co-locate AYUSH services in at least 50 per cent of primary health centres, 70 per cent of community health centres and 100 per cent of district hospitals by 2022-23.6

  • Strengthen the Village Health Sanitation and Nutrition Day platform to cover a broader set of health issues across various population groups instead of only focusing on child health.

  • Activate multiple channels (schools, colleges, women’s groups, traditional events like fairs, social media platforms, National Cadet Corps etc.) and prepare communication materials for catalysing behavioural change towards greater recognition of preventive health care.

  • Make nutrition, water and sanitation part of the core functions of panchayati raj institutions and municipalities.

2. Institute a public health and management cadre in states Incentivize state governments to invest in creating a dedicated cadre for public health at the state, district and block levels:

  • Characteristics of the cadre Train officials in public health related disciplines including epidemiology, biostatistics, demography and social and behavioural sciences.

  • Provide training in hospital management to suitably equip personnel responsible for managing large facilities.

  • Create a career pathway up to the highest levels within the state health departments for those trained in public health, as well as for those with clinical specialties.

3. Institutional mechanisms

  • Develop a model public health and management cadre by drawing upon best practices and engage with states to adapt, refine and institutionalize the model.

  • Formulate guidelines to create the cadre, primarily by re-aligning the requisite skill sets of existing functionaries with service conditions.

4. Create a focal point for public health at the central level with state counterparts

  • Create a designated and autonomous focal agency with the required capacities and linkages to perform the functions of disease surveillance, information gathering on the health impact of policies of key non-health departments, maintenance of national health statistics, enforcement of public health regulations, and dissemination of information to the public. An appropriately empowered and capacitated National Centre for Disease Control may be considered to play this role with support from relevant organizations.

  • Create a counterpart Public Health Agency in each state, where they do not already exist.

4. Miscellaneous

  • Explore the need for a Public Health Act to legislatively empower and, if necessary, institutionalise the Public Health Agency discussed above.

  • Redefine the role of the technical directorate (Directorate General of Health Services) and create a Directorate of Public Health.

  • Develop a comprehensive MIS including baseline data for NCDs.

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