Economics of health care

Economics of health care

Health care system in both developed and developing countries are increasingly becoming costly. 

Health care expenditure will increase due to increased life expectancy, rising burden of lifestyle diseases (LSDs), higher costs of pharmaceuticals, expensive diagnostic procedures and treatments. In India, with only 5.51 per cent of the population having some form of health insurance most health care spending are out of pocket.

Many patients are foregoing health care as they are unable to afford higher medical costs. According to WHO’S World Health statistics 2012, about 47 per cent and 31 per cent of hospital admissions in rural and urban India were financed by loans and sale of assets. Ill health pushes 39 million Indians to poverty every year.

 While most developed countries spent 8 to 10 percent of their GDP on health care, developing countries such as India are struggling hard to mobilise resources to improve their health care systems. The 12 th Plan outlay for the health sector is Rs 280,551 crore.This is just 2.5 per cent of GDP and is 232.65 per cent more than that in the 11th Plan.

Is it not better to have a system focused on health protection rather than illness care?   Unfortunately there is underinvestment in health protection and illness prevention within our health care delivery system. When we seriously plan to   overhaul the health care system in the country it is important to design prevention strategies.    

Reducing risk

Preventive interventions prevent or delay the occurrence of the very diseases that drive medical care costs. Prevention is an activity that will affect future health, through reducing the risk of future ill health and postponing death or promoting well-being.
 Prevention can be at three levels. While Primary prevention is aimed at limiting the development of risk factors, secondary prevention is aimed at reducing the development from risk factors to established disease. Tertiary prevention aims at reducing disease progression

As the Nobel laureate Amartya Sen said in 2002, the capability to achieve good health is the ability provided by social arrangements including income, environments and other social factors. The goal of prevention is to maximise the capabilities of each person to achieve good health. The economic case for prevention is not just the savings resulting from reduced health interventions but also the various benefits to society. Prevention can add years to life and life to years.

It leads to gain in society’s economic production due to increased labour force participation. Prevention will save expenditure on future health care payments. It results in improved well being from a different lifestyle and lower risks of future adverse events.The focus on prevention would save several lives, and reduce the pain and sufferings by the victims of chronic diseases.

Preventable causes of death such as smoking, poor diet, physical inactivity and excessive   alcohol consumption have been estimated to be responsible for several thousands of   deaths annually. Counseling adults to quit smoking, screening for colorectal cancer and providing influenza vaccinations reduce mortality either at low cost or at a cost saving.

 Lifestyle diseases (LSDs) have surfaced in 1940s.Prior to 1940s most deaths were due to infectious diseases.53 per cent of all deaths in India in 2005 were due to lifestyle diseases. Most LSDs are not easily curable with allopathic medicines alone. 

Diseases and deaths caused by lifestyle aberrations are preventable. Reducing the fat composition of diet, engaging in regular physical exercises and practicing relaxation techniques etc can prevent the occurrence of many diseases.

An increase in moderate physical activity by 3-5 hrs/week can lower the risk of many diseases. Thirty minutes of moderate physical activity can reduce the risk of heart attacks by 50 per cent. Lifestyle interventions focused on diet and physical exercises can reduce diabetes incidence. Intensive life style interventions are cost effective.

700,000 new cases of cancer are detected every year in India. Of this tobacco related is 30,0000. Chewing tobacco and gutka is the main reason. Cost of treatment for an oral cancer patient is estimated to be about Rs 4,00,000.Most oral cancers are preventable by avoiding the use of tobacco and tobacco products

 Cost effective preventive interventions are the need of the hour in an environment of resource scarcity. Such an approach will be a relief to most Indian families that meet 70 per cent of their health expenses out of their own pockets.

Get a round-up of the day's top stories in your inbox

Check out all newsletters

Get a round-up of the day's top stories in your inbox