Indians spent Rs 4.06 lakh crore on healthcare in 2023-24, according to the latest National Health Accounts. While government spending tripled to Rs 4.14 lakh crore, families still carry a heavy burden. Out-of-pocket costs fell to 42.7% of total spending, but many households continue to pay for medical services directly.
Government health expenditure tripled to Rs 4.14 lakh crore, accounting for 43.5% of total health spending
India's healthcare expenditure reached Rs 9.52 lakh crore in 2023-24, reflecting a significant increase in spending on medical services, medicines, hospitals and healthcare infrastructure. However, despite rising government investment and a decline in out-of-pocket expenditure over the past decade, households continue to shoulder a substantial share of the country's healthcare costs. According to the latest National Health Accounts figures for 2023-24, households spent Rs 4.06 lakh crore directly on healthcare, highlighting the financial burden that medical treatment continues to place on Indian families. While out-of-pocket expenditure (OOPE) has declined considerably from previous years, it still accounted for 42.7 per cent of India's total health expenditure. The figures also reveal considerable differences in healthcare spending across states, the growing contribution of private hospitals, the substantial share of medicines in healthcare costs and the relatively smaller allocation towards preventive care.
India's Out-Of-Pocket Healthcare Spending Falls Over A Decade
One of the significant findings is the decline in the proportion of healthcare expenses paid directly by households. Out-of-pocket expenditure accounted for 42.7 per cent of India's total health expenditure in 2023-24, compared with 64.2 per cent in 2013-14. This indicates a reduction of 21.5 percentage points over a decade, suggesting that government financing and other healthcare funding mechanisms have played a growing role in reducing the direct financial burden on families. However, the absolute amount remains substantial. Indian households collectively spent Rs 4.06 lakh crore on healthcare during 2023-24. On average, this translated into an out-of-pocket healthcare expenditure of Rs 2,901 per person.
Out-of-pocket expenditure includes payments made directly by individuals and families for medical consultations, diagnostic tests, medicines, hospitalisation and other healthcare services that are not covered by insurance or government-funded healthcare arrangements.
Government Healthcare Spending More Than Triples
Government investment in healthcare has increased significantly over the past decade. Government health expenditure more than tripled to Rs 4.14 lakh crore in 2023-24. It accounted for 43.5 per cent of India's total health expenditure during the year, indicating the growing contribution of public financing to the country's healthcare system. However, government health expenditure stood at 1.43 per cent of India's Gross Domestic Product (GDP). This highlights the continuing gap between the country's overall healthcare requirements and the resources allocated through public spending. The increasing government contribution, alongside the decline in out-of-pocket expenditure, suggests a gradual shift towards greater public financing. Nevertheless, the fact that households still contributed Rs 4.06 lakh crore demonstrates that families continue to bear a considerable share of medical expenses.
Private Hospitals Account For Nearly Twice The Spending On Government Hospitals
The distribution of healthcare expenditure also highlights the significant role played by India's private healthcare sector. Private hospitals accounted for Rs 2.67 lakh crore in healthcare expenditure in 2023-24, almost twice the spending on government hospitals. They represented 31.9 per cent of current health expenditure. This reflects the substantial contribution of private healthcare facilities to India's overall healthcare delivery system. For patients, the distribution of expenditure is important because the cost of treatment can vary considerably depending on the type of hospital, the complexity of the medical condition, the duration of hospitalisation and the services required. The significant share of private hospitals also highlights why healthcare affordability and insurance coverage remain important considerations for Indian households.
Medicines Account For 30.2% Of Healthcare Expenditure
Medicines represent another major component of India's healthcare spending. The country spent Rs 2.53 lakh crore on pharmaceuticals in 2023-24, accounting for 30.2 per cent of current health expenditure. Prescribed medicines alone accounted for 17 per cent of current health expenditure, underlining the substantial contribution of medication costs to the overall healthcare burden. The figures highlight how healthcare expenses extend beyond hospitalisation and medical procedures. For people managing chronic conditions, requiring long-term medication or undergoing repeated treatment, medicine costs can become a recurring financial responsibility. The high share of pharmaceutical expenditure also brings attention to the importance of affordable medicines and access to essential drugs.
Private Health Insurance Spending Reaches Rs 97,167 Crore
Health insurance is another important component of healthcare financing in India. Expenditure through private health insurance reached Rs 97,167 crore in 2023-24. In comparison, expenditure through government-financed health insurance stood at Rs 33,385 crore. The difference highlights the larger contribution of private health insurance expenditure compared with government-financed insurance in the reported figures. However, household out-of-pocket spending remained considerably higher. At Rs 4.06 lakh crore, direct household expenditure was around 12 times the expenditure on government-financed health insurance. This gap highlights the need to strengthen financial protection mechanisms so that families are not forced to depend heavily on personal savings when faced with medical emergencies or prolonged treatment.
Inpatient Treatment Accounts For The Largest Share Of Healthcare Spending
The distribution of healthcare expenditure across different types of services reveals another important trend. Inpatient curative care accounted for 38.2 per cent of current health expenditure in 2023-24. This includes treatment that requires patients to be admitted to hospitals or other healthcare facilities. In comparison, preventive care accounted for just 8.8 per cent of current health expenditure. The difference points towards a greater concentration of healthcare resources on treating illnesses rather than preventing them. Preventive healthcare includes services such as health screenings, immunisation, early detection of diseases, health education and interventions aimed at reducing the risk of developing medical conditions. Greater investment in preventive healthcare can help identify health problems earlier, potentially reducing the need for expensive treatments and hospitalisation in the long run. The report also found that primary care accounted for 46 per cent of current health expenditure, highlighting the significant role of primary-level healthcare services in the country's healthcare system.
Healthcare Spending Varies Significantly Across Indian States
The National Health Accounts figures also reveal considerable differences in government health spending across states.Per-capita government health expenditure stood at Rs 16,026 in Sikkim, compared with just Rs 1,399 in Uttar Pradesh. This represents a difference of more than 11 times, highlighting the considerable variation in public healthcare spending between the two states. The figures suggest that government healthcare investment is not evenly distributed across the country. Differences in state budgets, population size, healthcare infrastructure and public health priorities can influence per-capita expenditure. Out-of-pocket healthcare spending also varied considerably across states.
Among the selected states covered in the report, out-of-pocket expenditure accounted for 65.2 per cent of total health expenditure in Kerala. In Karnataka, the corresponding share was 28.5 per cent. This variation highlights how the financial burden of healthcare differs across regions, even as the country records an overall decline in household spending as a proportion of total health expenditure.
What Do These Healthcare Spending Figures Mean For Indians?
India's healthcare expenditure figures for 2023-24 point towards two contrasting developments. On one hand, government health spending has increased more than threefold over a decade, while the share of out-of-pocket expenditure has declined from 64.2 per cent to 42.7 per cent. On the other hand, households still spent Rs 4.06 lakh crore directly on healthcare, while private hospitals and pharmaceutical products continued to account for substantial portions of healthcare expenditure.
The relatively smaller share of preventive care compared with inpatient curative treatment also raises questions about the balance between treating illnesses and preventing them. Ultimately, the figures underline the importance of improving access to affordable healthcare, strengthening public health infrastructure, expanding financial protection through insurance and increasing investment in preventive and primary healthcare. Although India's healthcare financing landscape has changed considerably over the past decade, reducing the financial burden on households remains an important challenge.