CUMULATIVE HEALTH CARE EXPENDITURE:
This term refers to the overall amount spent on healthcare services by individuals, governments, and private organizations over a given time period. It includes the costs of hospital care, medications, medical supplies, preventative care, and healthcare administration. Cumulative healthcare expenditure has increased in both industrialized and developing countries during the last few decades as a result of a variety of causes, including aging populations, technological developments, and rising demand for healthcare services.
PERCENTAGE OF INCREASE IN HEALTH EXPENDITURE:
Global health care expenditure has increased significantly over the last two decades, as measured by percentage. On average, global health expenditure has increased by 4-5% per year. throughout many nations, healthcare prices have more than quadrupled or tripled throughout this time. Healthcare costs have soared in India as well. According to the World Bank, India's health expenditure as a proportion of GDP has risen from around 2.5 percent in 2000 to 3.5% in 2020, indicating a significant increase in absolute spending. Globally, OECD countries such as the United States have seen more dramatic rises, with healthcare spending increasing from 13% of GDP in 2000 to 18% of GDP by 2020, driven by sophisticated medical technologies and rising pharmaceutical costs.
REASONS FOR INCREASED HEALTHCARE SPENDING:
1) Increasing demand for healthcare services due to aging populations in many countries. Older folks demand greater medical attention, chronic illness management, and long-term care, which drives up healthcare expenditures.
2) Chronic illnesses: Increased prevalence of non-communicable illnesses (NCDs) include diabetes, cardiovascular disease, and cancer. Chronic diseases necessitate long-term care and costly medications, which raises overall healthcare costs.
3) Technological Advancements: While advances in medical equipment and therapies improve patient outcomes, they also lead to increased expenses. Advanced diagnostic technologies, robotic procedures, and precision medicine are expensive to create, execute, and maintain.
4) Pharmaceutical Costs: The cost of new treatments and pharmaceuticals has increased dramatically over time. Prices for life-saving pharmaceuticals, such as cancer therapies, are exceedingly high due to the research, development, and patenting processes, which raise overall healthcare costs.
5) Increased Access to Healthcare: Government measures, such as universal healthcare plans or insurance programs, have resulted in higher consumption of healthcare services. In India, schemes such as Ayushman Bharat have increased access to medical treatment, hence raising expenses. According to the PIB study, the Indian government's share of total health expenditure climbed from 28.6% in FY14 to 40.6% in FY19.
6) Healthcare Workforce Shortages: Despite a total stock of 5.76 million health workers, according to the NHWA- 2018 report, a shortage of healthcare professionals has contributed to rising labor costs in the sector. Demand for qualified doctors, nurses, and allied health professionals exceeds supply.
IMPACT OF INCREASED HEALTHCARE SPENDING ON ORDINARY PEOPLE AND GOVERNMENTS:
(A) For the Common People:
1)Increased Out-of-Pocket Spending: As healthcare expenses rise, many people, particularly those in nations with limited insurance coverage, are obliged to pay more out of pocket. This can cause financial difficulty and drive families into poverty, particularly in low-income nations.
2)Insurance Premiums: In nations where healthcare is covered by private insurance, increased expenses are passed on to consumers through higher insurance premiums. This makes healthcare more expensive for low- and middle-income families.
3)Access to Care: Rising healthcare costs may limit access to care. Individuals may postpone or skip critical treatments owing to the cost, resulting in poorer health outcomes and increased future costs.
(B) For governments:
1)Increased Budget Allocations: Governments must devote a greater portion of their budgets to healthcare services, potentially at the expense of other critical sectors such as education, infrastructure, or social welfare.
2)Debt Burden: In nations with publicly funded healthcare systems, rising expenses can lead to increased government debt as more resources are allocated to managing public health programs. In the United States, for example, healthcare spending accounts for a significant portion of the national debt.
3)Policy Challenges: Governments must combine the desire for universal healthcare with the budgetary hardship of rising healthcare costs. This might result in difficult policy decisions, such as rationing healthcare services or decreasing spending in other sectors.
HOW TO SURVIVE RISING HEALTHCARE COSTS?
1) Preventive Healthcare: Investing in preventive treatment can help minimize the prevalence of chronic diseases. Promoting healthy lifestyles, regular check-ups, vaccines, and early disease detection can all contribute to a lower overall healthcare burden.
2) Health Insurance: Having comprehensive coverage helps prevent individuals from costly medical expenses. Expanding inexpensive health insurance schemes, such as Ayushman Bharat in India, will assist reduce the financial burden of medical emergencies.
3)Investing in telemedicine and digital health technology can lower healthcare delivery costs. Remote consultations, digital prescriptions, and health applications enable more affordable and accessible healthcare.
4) Healthcare Efficiency: Governments may enhance healthcare efficiency by decreasing waste, administrative costs, and negotiating better prices for medications and medical equipment.
5) Public-Private Partnerships (PPPs) can cut government costs and improve healthcare access. These collaborations can use private sector expertise to provide more effective healthcare services.
6) Healthcare Workforce Expansion: Training additional healthcare professionals can address shortages and lower labor costs due to increased demand for healthcare services. Medical education and incentives for healthcare personnel, especially in rural regions, might be beneficial.
INDIA'S SITUATION COMPARED TO THE GLOBAL SCENARIO:
India spends less on healthcare as a percentage of GDP than many other developed countries. For example, India's healthcare expenditure in 2020 will be around 3.5% of GDP, which is significantly lower than in countries such as the United States (18%) and Germany (11.7%). However, India has made tremendous headway in improving healthcare access, particularly through programs such as Ayushman Bharat, which aspires to cover more than 500 million people.
However, a substantial amount of healthcare expenses in India continue to be out-of-pocket, with people bearing more than 60% of the cost. India's health infrastructure lags behind several global benchmarks. There is a scarcity of hospitals, medical staff, and advanced medical equipment, particularly in remote communities.
In contrast, developed countries such as Japan, Germany, and Canada have strong healthcare systems that are supported by increased public spending and solid insurance schemes. These countries have also been able to better control healthcare costs through drug pricing restrictions and efficient healthcare delivery methods.
CONCLUSION: Rising healthcare costs pose considerable concerns for both individuals and governments. To endure this rising expense, a mix of preventative health practices, insurance coverage, and legislative changes are required. While India has made progress in healthcare access, more funding for public health facilities, digital healthcare, and efficient systems is required to meet global standards. Nations can achieve a more sustainable and equitable healthcare system by tackling the core causes of rising healthcare expenses and focusing on cost-effective methods for the future.
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