Invest More in Public Healthcare Facilities

This paper addresses whether it is worth investing in public healthcare facilities and strengthening the ­public delivery system. Based on our analysis of the National Sample Survey Office (NSSO 71st round) and for 2017–18 (NSSO 75th round), it is indeed prudent to increase investment to strengthen public healthcare delivery system in India. Our observations are made with respect to less developed and non-less developed states (namely, empowered action group (EAG) and non-EAG states, as per Government of India (GoI) classification).¹ We present two key results of the above-mentioned two surveys in support of our argument—first, there is a significant increase in utilisation, especially by the poorer sections of society, of public facilities for both outpatient (OP) and inpatient (IP) services, across EAG and non-EAG states and at the aggregate level and, second, as a result, there is a consequent fall in the overall financial burden on patients who would have otherwise used services of private healthcare providers. The net impact of this on the share of out-of-pocket ­expenditure (OOPE) to the gross domestic product (GDP) is considerable. Despite some variations in the methodologies adopted in reporting morbidity status of the population between the two rounds of the ­national sample surveys, we present ways to make our comparative obser­vations robust under certain assumptions. We discuss the ­relevance of our findings in the light of the national debate on whether to increase investment to strengthen public facilities to deliver care more directly to the people or purchase such services from private providers, as a policy choice (Sundararaman and Muraleedharan 2015; Jain et al 2015; Sundararaman et al 2016).

The paper is organised as follows—the following section provides an overview of the sample size and other design ­elements of the 71st round (for 2014) and 75th round (for 2017–18) of the NSS. In all the later sections, comparisons are made between 2014 and 2017–18, across various states, based on the above two rounds (GoI 2016, 2019). Then, we present the share of public and private facilities in the provision of OP and IP care in rural and urban regions. Following that, we compare financial burden on patients (OOPE) seeking care from private and public facilities and also compare financial burden for maternity services provided by private and public facilities. We conclude that it would be prudent to strengthen public service delivery with greater investments, in the light of the evidence from large surveys carried out across states.