Concerns Over India’s Healthcare System Raised by IMA

Chronic Underfunding and Its Implications

The Indian Medical Association (IMA) has expressed grave concerns regarding the sustainability of India’s healthcare system. The organization highlights that chronic underfunding, insurance-driven price controls, and unregulated foreign investments are undermining the country’s ability to provide affordable and accessible healthcare.

Policy Document Highlights

In its policy document, titled “IMA’s Blueprint for a Healthier India,” the IMA emphasizes that the strength of India’s healthcare lies in its extensive network of neighborhood clinics and small to medium hospitals. However, this framework is increasingly threatened by insufficient public investment and mounting commercial pressures. The IMA is sharing this document with Members of Parliament to advocate for necessary policy reforms.

Government Spending on Health

The association notes that current government spending on health is significantly below required levels. India’s total health expenditure is approximately 3.8% of its GDP, in contrast to the average of 5.2% observed in other low- and middle-income nations. The IMA has urged that government health expenditure be increased to at least 2.5% of GDP, with dedicated budgets for essential services such as drinking water and sanitation, which directly affect health outcomes.

Financial Burden on Patients

As public hospitals face chronic underfunding, patients are increasingly reliant on private healthcare, leading to substantial out-of-pocket expenses. Nearly two-thirds of this expenditure is directed towards outpatient care, primarily for medications. The IMA reported that this financial strain pushes over 55 million Indians into poverty annually due to health-related costs.

Current Health Expenditure Analysis

In 2024, the total government health expenditure was recorded at Rs 4.95 lakh crore, while private spending reached Rs 9.3 lakh crore. Out-of-pocket expenses alone accounted for Rs 8 lakh crore, with health insurance covering merely Rs 1.32 lakh crore. To achieve the objectives of Viksit Bharat 2047, the IMA advocates for an increase in health spending to at least 5% of GDP by 2030.

Concerns Regarding Foreign Direct Investment

The IMA also raised concerns about the effects of unregulated foreign direct investment (FDI) in the healthcare sector. While FDI has introduced capital and technology, the IMA cautions that unchecked investments could enable corporate interests to influence clinical decisions and escalate treatment costs. The organization calls for stricter regulations on FDI and proposes the establishment of a National Healthcare Fund to support Indian healthcare entrepreneurs and facilitate hospital expansion.

Universal Health Care vs. Universal Health Coverage

The IMA emphasizes the distinction between Universal Health Care and Universal Health Coverage. While the latter focuses on financial protection, Universal Health Care is concerned with equitable access to quality treatment. The association insists that the government must take primary responsibility for ensuring Universal Health Care through a tax-based system, with public hospitals serving as the primary providers.

Warnings Against Insurance-Led Models

In its analysis, the IMA warns against transitioning to insurance-led healthcare models that could result in a system akin to that of the United States, characterized by high costs and inequality. The Ayushman Bharat–PMJAY scheme is described as well-intentioned but fundamentally flawed, primarily due to inadequate funding and unscientific package rates that render it unviable for small and medium hospitals.

Recommendations for Improvement

The IMA recommends that government hospitals receive direct funding while utilizing PMJAY to procure services from private hospitals at scientifically established rates. The association also notes that the current PMJAY allocation of Rs 9,406 crore is insufficient for meeting the needs of the healthcare system.