India's health sector not performing well: Niti Aayog

A report by Niti Aayog raises concern for India's health system, saying it needs improvement. It also charts a clear roadmap for its complete transformation.

New Delhi: India's health system is under-performing and lagging behind many comparable countries in key performance indicators, a NITI Aayog report said.

The report - Health Systems for a New India: Building Blocks - Potential Pathways to Reforms - released here on Monday said: "Severe fragmentation, compounded by market failures and governance challenges, is the key driver of India's underperforming health system."

The report charts a clear roadmap for the complete transformation of India's health system. It focuses on breaking silos in the health space and removing fragmentation between various initiatives, ensuring greater convergence between ministries as well as the Centre and the states, as already initiated under the Ayushman Bharat scheme.

Read:Smriti Irani, Bill Gates launch Bharatiya Poshan Krishi Kosh

The report identified five focus areas of future health system -- deliver on unfinished public health agenda, change health financing away from out of pocket so spend into large insurers, integrate service delivery vertically and horizontally, empower citizens to become better buyers of health, and harness the power of digital health.

The report noted that health financing is fragmented at all three levels -- revenue sources, health insurance (financial risk pooling), and strategic purchasing (how funds are used to set incentives for service providers to maximise efficiency, responsiveness and quality in the health service provider market).

There are high levels of fragmentation in the sources of revenues, with most health expenditure (about 62 per cent) coming directly from households.

Currently, the government (Union and the states put together) spends roughly 1.13 per cent of GDP on health, which is grossly inadequate compared to similar spending by other countries.

As a result, 62 per cent of healthcare spending is financed by households through out-of-pocket expenditure at the point of care.