Estimating funds required for UHC within Indian States

Elsevier, The Lancet Regional Health - Southeast Asia, 2023, 100165, ISSN 2772-3682
Nachiket Mor, Sudheer Kumar Shukla


Universal Health Coverage (UHC) has been high on national and international agendas since its adoption as one of the Sustainable Development Goals (SDGs). Within India, there is a wide variation in the total amounts per capita spent by each state government (Government Health Expenditure or GHE) on healthcare. Bihar, with a GHE of 

556 per capita (per annum), has the lowest state government spending, but there are many states in which governments spend more than four times that amount on a per capita basis. However, despite this, no state offers UHC to its residents. This failure to provide UHC could be because even the highest amounts spent by the state governments are too low for them to offer UHC or because the cost differences between states are very high. It is also possible, however, that a poor design of the government-owned health system and the degree of waste embedded within it could account for this. It is important to understand which of these factors is responsible because it then provides a clue as to what the best path to UHC might be in each state.


One way to do that would be to arrive at one or more broad estimates of the amounts needed to finance UHC and to compare them with actual amounts being spent by the governments in each state. Older research provides two such estimates. In this paper, using secondary data, we add to them using four additional approaches so that we can build greater confidence in the estimation of amounts needed by each state to offer UHC to its residents. We refer to these as Outside-in, Actuarial, Normative, and Inside-Out.


We find that, with the exception of the approach which assumes that the current design of the government health system is optimal and only needs added investment to offer UHC (the Inside-out approach), all the other approaches give a value of between 

1302 and 2703 per capita for UHC, with 2000 per capita providing a reasonable point estimate. We also find no evidence to support the view that these estimates are likely to vary between states.


These results suggest that several Indian states may have an inherent ability to offer UHC with government financing alone and that a high degree of waste and inefficiency in the manner in which government funds are currently being deployed may well be behind their apparent inability to do so already. Another implication of these results is that several states may also be further away from the goal of offering UHC than an initial analysis of their GHE as a proportion of their Gross State Domestic Product (GSDP), i.e., GHE/GSDP, may suggest. Of particular concern are the states of Bihar, Jharkhand, Madhya Pradesh, and Uttar Pradesh, all of which have GHE/GSDP greater than 1%, but because their absolute levels of GHE are well below 

2000, in order to reach UHC, they may need to more than triple their annual health budgets.


The Christian Medical College Vellore supported the second author (Sudheer Kumar Shukla) through a grant from the Infosys Foundation. Neither of these two entities had any role in the study design, data collection, data analysis, interpretation, writing of the manuscript, or the decision to submit it for publication.