Value for Money in Health: Efficiency of healthcare system in India

Abstract

India has made a noticeable progress on health status in the recent period. However, there are wide gaps in the health sector in terms of infrastructure, human resources and public spending. In India, the government spending on health has been increasing over the years. But, people do not receive the sufficient healthcare from the healthcare spending. The primary objective of this study is whether the provision of healthcare exceeds the costs of the healthcare and healthcare system is efficient in terms of getting good Value for Money (VfM). To estimate the efficiency of healthcare system, this study attempt to measure the VfM by comparing the expenditure on health to the availability, use and access to health resources in each state. The estimated results show that there are a numerous variations between states in getting better VfM from their healthcare spending. The lower VfM in the states indicates the inefficiency of healthcare systems. The results also suggest that states those received the highest VfM are scored better in access and use of health resources. It can be observed from the results the high expenditure does not have any impact on provision of healthcare unless the healthcare system of the state is functioning well. Therefore, strengthening the healthcare systems and making them more equitable have been recognized as the key strategies for improving the better outcomes in health sector.

Key words: Provision of healthcare, Healthcare expenditure, Healthcare system, Value for money, Min-max method, Under achievers, over achievers