The Central Government is planning to introduce a National Health Accounts (NHA) system in the country to make it a comprehensive system capable of tracking the financial flows into the health sector. The NHA system will make a detailed analytical exposition of financial flows of health sector and will provide directions to the policy makers to address, more effectively the equity and efficiency aspects of public health care.

The development of health accounts is aimed at bringing all the players in the sector in the common framework. It would require a well coordinated institutional arrangement to go beyond the Ministry/Department of Health, such as Central Statistical Organisation, Ministries of Finance, Railways, Defence and so on, in order to present a complete picture of financial flows.

Recently, the Directorate General of Health Services in collaboration with WHO organised a workshop on "National Health Accounts in India: The Way Forward" to discuss major challenges facing the country in focusing expenditure on specific aspects, diseases and regions.

The speakers of the seminar felt that the focus of the new system should go beyond the traditional approach of public sector or private sector in a macro sense. “Intricacies involved in who delivers what, who pays for what and what is delivered to whom, etc. are to be brought out through the development of a system of health accounts,” they suggested.

Health accounts have been developed in many other countries to track the resource flow like, where the resources come from and where and on what services they are defrayed.
The country is also looking for models that have been developed in neighboring countries like Sri Lanka, Thailand, etc. while framing a system for India.

Speaking on the occasion, the Secretary, Health, S.K. Naik said that financing of health sector has been a serious concern as the private sector spending is beyond the ambit of the policy makers. Public financing of health sector has been under severe stress for a decade or so due to overall fiscal stringency in the economy. Factors like, changing fiscal policies in tune with rationalisation, adjustments, pay commission recommendations and so on, have adversely affected the finances of the Central and State Governments. As a result, the efficiency of health sector spending in comparison with other countries has been significantly low.

Elaborating on the equity and efficiency issues of health financing, Naik said that health sector should be seen in totality. Countries around the world have been experimenting and developing a framework, National Health Accounts (NHA) to trace effectively the financial flows in the health sector with the above objectives. Neighboring countries such as Sri Lanka and Thailand have successfully developed and put in place the NHA framework. It is time now for India too to develop and structure the health sector financing to address the issues, he pointed out.

National Health Accounts are a tool, which describe the expenditure flows – both public and private – within the health sector of a territory. They describe the sources, uses and channels for all funds utilised in the entire health sector. The emphasis in NHA is to describe in an integrated way who pays, how much, and for what, separating the whom from the what. In other words, NHA show the amount of funds provided by major sources (e.g. government, autonomous bodies, non-profit organizations, households) and how these funds are used in the provision of services, organised according to the institutional entities providing the services (e.g. MOH hospitals, state and local bodies health facilities, private doctors, pharmacies, Ayurvedic providers etc.). NHA may disaggregate spending according to the identity of service beneficiaries (e.g. gender, province/district, income level) and type of service (e.g. inpatient and outpatient care, dental services, medical research, etc.)