India’s Public Health Spending Reaches Record High as Out-of-Pocket Medical Costs Decline

India has recorded a significant rise in government healthcare spending over the past decade, accompanied by a major reduction in out-of-pocket medical expenses for citizens, according to the latest National Health Accounts (NHA) Estimates 2022–23 released by the Union Health Ministry.

The report, prepared by the National Health Accounts Technical Secretariat (NHATS) under the Ministry of Health and Family Welfare, highlights the growing role of public financing in India’s healthcare system and reflects the Government’s ongoing push toward Universal Health Coverage (UHC).

The National Health Accounts report is based on the internationally recognised System of Health Accounts (SHA 2011) framework and provides a detailed assessment of health expenditure patterns across the country.

Government Health Spending Continues to Rise

According to the report, Government Health Expenditure (GHE) as a share of India’s Gross Domestic Product (GDP) increased from 1.15% in 2013–14 to 1.43% in 2022–23. Under the revised GDP series using 2022–23 as the base year, the figure stands slightly higher at 1.48%.

The data reflects a steady increase in public investment in healthcare infrastructure, services, insurance coverage, and disease management over the last decade.

Government spending on health as a proportion of overall General Government Expenditure (GGE) also rose from 3.78% in 2013–14 to 4.89% in 2022–23, indicating that healthcare has become an increasingly important priority in public budgeting.

In per capita terms, government healthcare spending has grown nearly 2.7 times over the period, increasing from ₹1,042 per person in 2013–14 to ₹2,786 in 2022–23.

Out-of-Pocket Medical Expenses Continue to Decline

One of the most significant findings in the report is the sharp reduction in Out-of-Pocket Expenditure (OOPE) by households.

OOPE refers to direct payments made by individuals for healthcare services, medicines, diagnostics, and hospital treatment without reimbursement.

According to the report:

• OOPE as a share of Total Health Expenditure (THE) declined from 64.2% in 2013–14 to 43.4% in 2022–23

• This represents a decline of nearly 21 percentage points over the decade

The Government said the reduction reflects the impact of expanded public health schemes, insurance programmes, and increased healthcare financing aimed at reducing financial burdens on households.

Lower out-of-pocket costs are considered a key indicator of progress toward Universal Health Coverage, as they reduce the risk of families falling into poverty due to medical expenses.

COVID-19 Pandemic Drove Temporary Surge in Health Spending

The report also highlighted the extraordinary increase in healthcare expenditure during the COVID-19 pandemic.

Government health expenditure rose to 1.84% of GDP in 2021–22 as India mobilised large-scale emergency healthcare resources to combat the pandemic.

This included spending on:

• Emergency COVID Response Packages (ECRP-I and ECRP-II)

• Nationwide vaccination campaigns

• Public health infrastructure

• Pandemic management systems

India’s COVID vaccination programme became one of the largest vaccination drives globally.

During this period, the share of OOPE in Total Health Expenditure dropped further to 39.4%, reflecting the substantial role played by public financing during the health emergency.

Public Financing Playing Larger Role in Healthcare

The report shows a major shift in the structure of India’s healthcare financing system.

Government Health Expenditure’s share in Total Health Expenditure increased from 28.6% in 2013–14 to 43.7% in 2022–23 — an increase of nearly 15 percentage points.

Officials said this demonstrates the growing importance of public financing in delivering healthcare services and improving affordability.

The Government described the trend as evidence that India is moving toward:

• More equitable healthcare access

• Improved financial protection

• Expanded healthcare affordability

• Stronger public health infrastructure

Social Security and Health Insurance Coverage Expanding

The report also recorded growth in Social Security Expenditure (SSE) on healthcare.

SSE includes:

• Government-funded health insurance schemes

• Medical reimbursements for government employees

• Social health insurance programmes

• Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY)

The share of SSE in Total Health Expenditure increased from 6% in 2013–14 to 9.9% in 2022–23.

Meanwhile, Private Health Insurance expenditure also grew substantially, increasing from 3.4% to 9.2% of Total Health Expenditure during the same period.

The Ministry said the increase reflects:

• Greater public awareness about health protection

• Rising healthcare utilisation

• Improved purchasing power

• Growing adoption of insurance coverage

Universal Health Coverage Remains Key Goal

Reducing financial hardship caused by medical expenses remains a central objective of India’s healthcare strategy.

The Government stated that various schemes and reforms introduced over the last decade have focused on expanding access to affordable healthcare while improving financial protection for vulnerable households.

Programmes such as Ayushman Bharat, expanded primary healthcare services, digital health initiatives, and public insurance schemes have played a major role in improving access to medical care.

The report suggests that continued increases in public financing could further reduce household healthcare burdens and strengthen India’s healthcare system over the coming years.

National Health Accounts Institutionalised Since 2014

Preparation of National Health Accounts estimates was institutionalised in 2014 at the National Health Systems Resource Centre (NHSRC), which serves as the National Health Accounts Technical Secretariat.

The latest report marks the tenth edition of India’s health expenditure estimates under the SHA 2011 methodology.

The NHA expert group includes representatives from:

• Ministry of Statistics and Programme Implementation (MOSPI)

• NITI Aayog

• Ministry of Jal Shakti

• National Institute of Public Finance and Policy (NIPFP)

• National Council of Applied Economic Research (NCAER)

• Institute of Economic Growth (IEG)

• National Health Authority

The Ministry said the data will continue to support evidence-based policymaking, healthcare planning, and long-term reforms aimed at strengthening India’s public health system.