The importance of investing in a public health system: evidence from COVID-19 mortality.

Abstract

Mortality due to COVID-19 has varied across the states of India. We exploit this history to investigate the possible role of health policy in the outcome. Using three different measures of the death rate, we find to a varying degree, evidence that the level of public expenditure on health has made a difference to the state-wise mortality rate. Based on this, we proceeded to analyse the expenditure pattern in the states. The average level of expenditure on health is found to be low both of itself and in relation to spending by governments in South and Southeast Asia. In much of the territory of India spending on the police exceeds that of spending on health. Furthermore, richer states spend relatively less on it, implying that spending on health is a matter of choice for states rather than dictated by financial constraints. Two conclusions follow. First, some of the mortality from COVID-19 is policy induced, and therefore was avoidable. Second, though the evidence is drawn from the experience with COVID-19, we may assume that assuring health security to the Indian population would require a radical restructuring of the spending priorities of the states.