‘Equitable healthcare policies needed for better contribution to GDP’

Bengaluru: India’s healthcare expenditure is expected to surge from 3.3 per cent to 5 per cent of the country’s GDP by 2030, according to a report by credit ratings company CareEdge out on Monday.

Currently, global healthcare spending stands at $10 trillion, about 10 per cent of the world’s GDP, with developed nations like the US, Germany, and Japan incurring relatively high per capita spending.

In contrast, developing countries allocate a smaller portion of their GDP to healthcare. For example, India currently spends 3.3% of its GDP on healthcare (as of 2022), which is below the average of 5.1% for developing countries.

Higher public spending, along with increased private investments in the healthcare sector, insurance expansion, policy support, and demographic shifts, are driving a structural change.

Additionally, India's per capita healthcare expenditure is $80, significantly lower than the sample average of $354 for developing nations. This underinvestment has resulted in inadequate healthcare infrastructure and services, stated the report, though it noted India’s lower per capita income as a key reason.

The rising share of the population aged over 45 years, coupled with income growth, is also expected to catalyse higher demand for quality healthcare services. This demand will likely translate into sustained investments across the entire chain from medical education to hospital infrastructure and digital healthcare technologies, projected the report.

However, constraints in rural healthcare infrastructure and the availability of a trained workforce remain critical challenges in expanding coverage.

Currently, the per capita availability of hospital beds and doctors in urban areas is estimated to be about three times that of rural areas. More than 60% of all available hospital beds are operated by the private sector, which tends to invest in urban areas.

Although the government has mandated rural service for doctors trained in public institutions, the long-term effectiveness of such measures is limited without complementary incentives and systemic support. India must focus on the equitable distribution of resources in order to capitalise on this opportunity, noted the report.