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ORIGINAL ARTICLE
Year : 2017  |  Volume : 61  |  Issue : 2  |  Page : 81-85  

Direction of uneven health-care expenditure: Evidence from Northeast India


1 Research Fellow, Indian Institute of Public Health, Shillong, Lawmali, India
2 Assistant Professor, Department of Economics, Sikkim University (A Central University), Gangtok, Sikkim, India

Date of Web Publication2-Jun-2017

Correspondence Address:
Tiken Das
Research Fellow, Indian Institute of Public Health, Shillong, Lawmali - 793 001
India
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Source of Support: None, Conflict of Interest: None


DOI: 10.4103/ijph.IJPH_315_15

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   Abstract 

Background: Although the need for ensuring universal coverage in health has received the attention of policymakers under the Millennium Development Goals program, the skewed pattern of health-care expenditure has been increased globally. Objective: To find out the pattern of public health-care expenditure in northeastern states of India and also to identify the nature of inter-state variation in health-care expenditure among the states. Methods: The study was based on the secondary data collected from the State Finance Figures of Budgetary Statistics of Reserve Bank of India. The period of study was 13 years (2002–2003 to 2014–2015). The study used descriptive statistics and composite supply-side index separately for revenue and capital expenditure by randomizing through the population census figures of 2001 and 2011 for examining the pattern of interstate variation in health-care expenditure. Results: It has been observed that the states having higher mean expenditure registered low compound annual growth rate in health expenditure and thereby causing low per capita value and lower value of the composite index. Conclusion: Thus, the largely populated state needs the due attention of policymaker in reducing the skewed pattern of health-care expenditure.

Keywords: Capital expenditure, public health care, revenue expenditure


How to cite this article:
Das T, Guha P. Direction of uneven health-care expenditure: Evidence from Northeast India. Indian J Public Health 2017;61:81-5

How to cite this URL:
Das T, Guha P. Direction of uneven health-care expenditure: Evidence from Northeast India. Indian J Public Health [serial online] 2017 [cited 2017 Nov 17];61:81-5. Available from: http://www.ijph.in/text.asp?2017/61/2/81/207412


   Introduction Top


One of the important components of human resource development is the investment in health care where the role of public expenditure is vital. It was argued that the empowerment of people comes from the freedom from poverty, hunger, malnutrition, and freedom to work and lead a healthy life.[1] In addition, the importance of human capital accumulation in the growth process was stressed in the works of various growth theories.[2],[3] As mentioned, the expenditure on health and nutrition forms an important part of human capital investment.[4] No doubt, the need for ensuring universal coverage in health had received the attention of policymakers under the Millennium Development Goals (MDGs) program in many less developed and developing nations. Parallely, the skewed pattern of health-care expenditure has increased globally. The Organization for Economic Cooperation and Development countries accounted for <20% of the world's population but shared almost 90% of the world's health spending, and remaining 80% of the world's population spent only 10% of the total expenditure on health care. Interestingly, Africa accounted for about 25% of the global burden of disease, but only about 2% of global health spending.[5] Besides, health-care expenditure as a percentage of gross domestic product (GDP) and per capita health expenditure has also highly unequal when we compare the developing countries with advanced countries, for example, only 0.02% of GDP was spent on health care in China while the percentage was little over 13% in the USA.[6] The unequal health-care expenditure can also be observed among different categories of income groups and regions.[7]

In India, public health expenditure had been grossly inadequate right from the 1940s. The steadily rising rate of economic growth in India has recently been around 8%/year, and there is much speculation about whether and when India may catch up with and surpass China over 10% growth rate.[8] However, life expectancy at birth in China was 75.41 years; in India, it was 68.3 years while the infant mortality rate (IMR) was 40/1000 live births in India compared with just 9 in China; the mortality rate for children under-5 was 47.7/1000 live births for Indians and 11 for the Chinese; and the maternal mortality rate was 174/100,000 live births in India and 27 in China.[9] Moreover, it was stated that the per capita private expenditure on health in India in the preindependence period was ₹2.5 compared to a state per capita health expenditure of ₹0.36 which was one-seventh of private expenditure.[10] During the 1950s and 1960s, private health expenditure was 83% and 88% of the total health expenditure, respectively, in India.[11] As per 2007 estimates, India spent 0.9% of GDP on health expenditure while the average public spending of less developed country was 2.8% of GDP. Further, only 17% of all health expenditure was borne by the government, rest being borne privately by the people, making it one of the most highly privatized healthcare systems of the world.[12] There has been considerable fall in the relative share of health expenditure on total government expenditure from 1999–2000 to 2004–2005.[13] Similarly, if we look at the changing pattern of government health expenditure in India from 1987–1988 to 2011–2012, we found that government health expenditure (% of GDP) had almost remained constant during that period. However, mild augmentations were observed with the inception of NRHM.[14] Indeed, the estimated value of elasticity of health expenditure revealed that 1% increase in state per capita income the public health-care expenditure was increased only by around 0.68% in India.[15] Even more, within India, there was huge gap among different states in economic terms and also in terms of the development of health sector.[16] In addition, it was mentioned the remarkable achievement of Kerala among other Indian states for its long history of widespread public support for education, health care, and food distribution despite being a poor state.[8] Thus, uneven health expenditure among countries and regions within countries is a contentious issue and needs to relook it.

Being one of the backward regions of the country, Northeast India sheltered by 81.6% of the total population living in rural area had only 4.9% of subcenters, 6.3% of primary health care (PHC) center, and 5.1% of community healthcare center of India as a whole as in March 2011.[17] There has been a considerable decline in the number of subcenter in Assam and Arunachal Pradesh whereas the subcenters have increased in Tripura. There has been an increase in the number of PHCs in Mizoram and Sikkim.[17] Wide range of variation being noticeable in IMR, neonatal mortality rate, and maternal mortality rate among the northeastern (NE) states of India as Manipur and Mizoram performed better than the national average while Arunachal Pradesh, Assam, Meghalaya, and Nagaland performed poorer than the national average.[18] Worsening of nutritional status was observed in Meghalaya, Nagaland, and the vaccination coverage in most of the NE states was less than all India, except Mizoram. The need for public awareness to demand the adequate level of public services and facilities was necessary for the Hill economies of NE India.[19] Under this backdrop, the present study made an attempt to find out the pattern of public health-care expenditure in NE states of India and also to identify the nature of inter-state variation in health-care expenditure among the states.


   Materials and Methods Top


Data sources

The present study was based on the secondary data collected from the State Finance Figures of Budgetary Statistics of Reserve Bank of India. The period of study was 13 years (2002–2003 to 2014–2015). Moreover, population data for NE states have also been collected from population census 2001 and 2011.

Variables and tools used

For obtaining per capita health-care expenditure, the study used state-specific population census figures of 2001 and 2011. Data were collected on two broad heads: revenue expenditure (An expenditure of the Government which neither creates assets nor reduce liability is called revenue expenditure, for example, salaries of employee, interest payment on past debt, subsidies, and pension) and capital expenditure (An expenditure incurred by the government for either creation of asset, for example, school building or reduce liability for example repayment of loan is called capital expenditure) on development and social service. Out of 12 different heads of social service expenditure, the study used expenditure on four heads such as medical and public health (MPH), water supply and sanitation (WSS), nutrition and family welfare (FW). Randomization was performed for the 13-year data for obtaining the per capita expenditure by subdividing the data series into two subperiods. The period 2002–2010 was randomized by 2001 census population figures while the 2011–2014 figures were randomized by 2011 census population figures. To get the relative figures of expenditure per lakh population, we randomized the absolute figures with population figures by the formula = amount of expenditure (in million)/population (in lakh). The study used descriptive statistics and composite supply-side index (CSSI) separately for revenue and capital expenditure by randomizing through the population census figures of 2001 and 2011 for examining the pattern of interstate variation in health-care expenditure. The CSSI was constructed with MPH expenditure, FW expenditure, WSS expenditure, and nutrition expenditure (N) by taking the figures of such indicators per lakh population for revenue expenditure, while for capital expenditure, the index was constructed using the expenditure on MPH and WSS per lakh population. As capital expenditure on FW was nil (mostly zero) for all the NE states for the study period, it was dropped while DE and SS expenditure were dropped because the expenditure on MPH and WSS falls under SS expenditure which being a part of DE. The distance-from-average method was used for the construction of the index. First, for each indicator, the actual value has been divided by the overall average of that indicator.



where

is the value of indicator q for states at time t

is the mean value of the indicator q for all the states at time t

q = 1, 2. 4 (for capital expenditure q = 1, 2)

Subsequently, the average of all the indicators gives us the proposed supply-side composite index



The index was constructed in two different heads – randomized by 2001 census figures and 2011 census figures.


   Results Top


It has been observed that the average development and social service expenditure was high in Assam and low in Sikkim during the 13-year period of study. From the estimates of growth of revenue and capital expenditure among the NE states, it was observed that the growth was recorded to be highest in Arunachal Pradesh and was lowest in Tripura for both in the development and social service. The expenditure growth of Sikkim was relatively low when compared to Arunachal Pradesh. Again, if we look into the capital expenditure growth across the NE states, then we can understand that the growth of expenditure was highest in Manipur and was smallest in Sikkim.

As expected, we found that the highly populated and large state like Assam has largest average expenditure while small states such as Sikkim and Mizoram have low average expenditure in both revenue and capital expenditure. However, if we look into the pattern of growth of expenditure, then it can be noticed that high mean expenditure (development and social expenditure) leads to the low compound annual growth rate (CAGR), for example, the case for Assam (while the case was different in the case of Sikkim and Mizoram). A similar picture was observed in case of capital expenditure growth. However, when we look at the output side by correlating revenue expenditure with IMR during 2009, 2010, and 2011, the correlation has been found to 0.3 in the eight NE states of India, which indicates that IMR has not declined in the NE states despite increased expenditure on MPH [Table 1].
Table 1: Infant mortality rate in Northeastern States

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Since the absolute figures of such expenditure do not reflect the true picture of the economy; hence, an attempt was made to randomize the absolute figure with respect to the population of the respective states. [Figure 1] illustrates the social expenditure per one lakh population randomized by population census figures of 2001 and 2011. No doubt, there has been an increase in the per capita expenditure both for social service expenditure across the NE states in the recent year. However, the per capita value of expenditure was found to be higher in Sikkim, Arunachal Pradesh, and Mizoram and was low in Assam, Meghalaya, and Nagaland. Likewise, similar expenditure pattern was observed while looking into the per capita value of capital expenditure across the NE states [Figure 2].
Figure 1: Social service expenditure under revenue expenditure per one lakh population among the northeastern states from 2002 to 2010 (Randomized by 2001 Population Census) and 2011–2014 (Randomized by 2011 Population Census) (amount in million).

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Figure 2: Social service expenditure under capital expenditure per one lakh population among the northeastern states from 2002 to 2010 (Randomized by 2001 Population Census) and 2011–2014 (Randomized by 2011 Population Census) (amount in million).

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Besides, a composite social service index was constructed separately for revenue and capital expenditure to examine the robustness of stated nature of variation in expenditure pattern being reported in [Table 2]. From [Table 2], it has been observed that the value of the index was highest in Arunachal Pradesh and lowest in Assam for the randomized population. Besides this, when we look into the indicator wise value of the index for the two different randomized population censuses figures across the NE states, then it can understand that the position was very unsatisfactory in the case of WSS among all the NE states, except Arunachal Pradesh [Table 2].
Table 2: Composite social service index of average revenue expenditure from 2002 to 2010 (randomized by 2001 population census) and 2011-2014 (randomized by 2011 population census)

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Similarly, CSSI of capital expenditure for NE states is reported in [Table 3]. Except Sikkim, we observed that the value of composite index has declined for 2011 while compared with 2001. Indicator-wise value of the index reveals that capital expenditure on MPH was unsatisfactory compared with WSS during the 13-year period of study [Table 3].
Table 3: Composite social service index of average capital expenditure from 2002 to 2010 (randomized by 2001 population census) and 2011-2014 (randomized by 2011 population census)

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   Discussion Top


As anticipated, we observed that states having larger population size have the larger value of mean development and social service expenditure while the less populated states have smaller mean expenditure. The growth rate of both revenue and capital expenditure was lower in Assam relative to Sikkim and Mizoram during the 13-year period of study. Thus, the states having high mean expenditure have registered low growth in both revenue and capital expenditure for the 13-year period of study. Although high populated large state has high average expenditure, the higher mean expenditure leads to low CAGR (e.g., in Assam). One of the reasons may be the relatively smaller increase in public expenditure compared with population growth in Assam for the period under study.

Moreover, the gap of the overall social service revenue expenditure index between the top and bottom states has been observed to be >5 times for 2001 randomized figures while the gap of the overall index between the top and bottom states has been observed to be >4 times for 2011 randomized figures. Sikkim continued to rank well in terms of the social service capital expenditure index while Assam at the bottom. The difference of index value between highest and lowest was >8 times. In an attempt to examine such statistical relation indicator-wise across the NE states, it was observed that the inverse relation between mean and CAGR was more serious in the case of FW and WSS during the 13-year study period.


   Conclusion Top


While the need for ensuring universal coverage in health has received the attention of policymakers under the MDGs program, the skewed pattern of health-care expenditure has been increased globally. The present study was conducted to understand the pattern of public health-care expenditure in NE states of India and also to identify the nature of inter-state variation in health-care expenditure among the states. We conclude that among the NE states, the states having higher mean expenditure registered low CAGR in health expenditure and thereby causing low per capita value and lower value of the composite index. It has been observed that the interstate inequality in health-care expenditure in terms of CSSI was very high among the top and bottom rank states of Northeast India. In terms of the different indicators as considered in the present study, the performance of Sikkim was satisfactory while that of Assam was less than satisfactory among other NE states for the 13-year period of study. Hence, the largely populated states need the due attention of policymaker in reducing the skewed pattern of health-care expenditure.

Financial support and sponsorship

Nil.

Conflicts of interest

There are no conflicts of interest.



 
   References Top

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Lalneizo D, Reddy S. Health status of children in North Eastern states of India. Indian Anthropol 2010;40:37-52.  Back to cited text no. 18
    
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    Figures

  [Figure 1], [Figure 2]
 
 
    Tables

  [Table 1], [Table 2], [Table 3]



 

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