India’s move to universal healthcare: will the government salvage the healthcare system?

By Moin Qazi

Despite a soaring economy, Indians across the country face very high costs of treating illnesses, which continues to undermine economic progress. This is largely on account of India’s dilapidated health care system: a major symptom of the dire lack of funding.

With an investment of 1.3% of GDP in health services, which has remained at the same level for a decade India ranked 187th out of 194 countries according to the World Health Organization (WHO). The global average for GPD investment in health services is around 6%, with countries such as Sri Lanka, China and Thailand having 1.5%, 2.7% and 3% respectively.

In response to the major health crisis prevalent in the country, the government recently announced the launch of the National Health Protection Scheme (NHPS) to provide government-sponsored insurance to around 10 crore families, accounting for 40% of the country’s population.  If the government lives up to its high–minded pronouncements, the programme will be potentially life-changing and transformative for a country where affordable and safe healthcare is elusive to millions of families   

NHPS promises to bring health care to the homes of Indians with the creation of 1.5 lakh health and wellness centres, as part of the Ayushman Bharat Programme which aims to address health holistically. However, it must be noted that this is not a new concept, the programme is simply a new name given for the decade-old primary health care centre system that will be upgraded to meet the new goal. Due to lack of staff, over 8% of health centres in villages have fallen into disuse over the years.

Healthcare expenses are a major cause of impoverishment of working families in India. Private healthcare has catastrophic costs that shave off hard-earned savings of patients and their families, thereby, becoming a primary route to bankruptcy. The Ministry of Health has found that a quarter of all people hospitalized were driven to penury by their hospital costs, not including the cost of missed work.

All these have damaging spillover consequences, including, less money available to households for food, education, housing and long-term plans. According to Dr David Dror, Founding Chairman of the Micro Insurance Academy and expert of Indian health insurance system, “a health event is a bigger risk to farmers than an unsuccessful crop.” He adds,” Once they sell their land or livestock, they become indentured labourers. That takes a generation to fix.”

The WHO has found that 50-65% of Indians lack access to essential medications, despite the country being the largest producer of generic medicines. This signals a need for the government to mass produce generic essential medications and distribute them to the population across the country through public health clinics. 

Another point to be noted is that the growth of healthcare facilities has been concentrated in the private sector, while, governmental hospitals continue to be under-resourced, understaffed and poorly managed, thereby delivering poor quality care. This has led to a rapid mushrooming of unregulated private providers, which today accounts for 93% of all hospitals, up from 8% in 1947. Private facilities also account for 64% of all beds and employ 85% of all doctors in the country. This contributes to the ever-widening gap between access to healthcare for rich and poor communities.

The 71st National Sample Survey (NSS) undertaken during January-June 2014 revealed that out of the total hospitalization cases in rural areas, 58% were in private clinics and 42% were in public hospitals. The corresponding figures for urban areas were 68% in private and 32% in public.

The other Indies of India’s healthcare are also highly alarming, with 63 million people pushed into poverty due to health care expenses. Additionally, hospital bed density in India is merely 0.9 per 1000 persons, while the minimum advocated by the WHO is 3.5 beds per 1000 people. Similarly, India only has around 0.7 doctors per 1000 people, while WHO minimum is 1 doctor to 1000 people.

Another challenge for the health sector is the lack of provision to deal with non-communicable diseases such as cardiovascular diseases, cancer, chronic respiratory diseases and diabetes. Unlike the short-term effects of communicable diseases, the dual health and economic impacts of non-communicable diseases on individuals, families and households are devastating and long-lasting. It is estimated that India is likely to lose $ 4.58 trillion before 2030 due to NCDs, as government-run healthcare system focuses on maternal and child care, especially at the rural level.

The government needs to supplement curative services with preventive measures by strengthening ancillary civic services like insect management, water purification systems sewage systems and treatment of waste. Due to poor hygiene and sanitation, people are suffering from pneumonia, undernutrition, malaria and tuberculosis across the country.

India must revitalize the public health system to ensure access, outcome, quality and affordability. The focus must be on finding solutions which are affordable, scalable and yet high-quality. For a country with a rich political history of broken promises, we are yet to see if the NHPS will provide a much-needed sigh of relief to the healthcare system.


Moin Qazi is the author of Village Diary of a Heretic Banker