By Moin Qazi
According to S&P Global Ratings, the healthcare scheme announced in the Budget will be a “game changer” for India’s health insurance sector. A recent report stated that an effectively executed National Health Protection Scheme (NHPS) will bring coverage to 40 percent of the population and generate substantial growth in health insurers premiums and increase cross-selling opportunities. Additionally, the government’s budget proposal to merge 3 public sectors of non-health insurers, United India Insurance, National Insurance and the Oriental Insurance, should reduce competition and facilitate improved underwriting discipline. Together, they contribute around 30 percent of market share of the non-life-insurance market in India, with a premium book of more than Rs 40,000 crores.
Illnesses: A risk to the poor
Illnesses are a severe risk which can shave off most of the hard-earned savings of the low-income communities. Hence, they become a primary route to bankruptcy. The Ministry of Health has found that a quarter of all people hospitalised were driven to penury by their hospital costs, not including the cost of missed work, even as the country struggles to adapt a rickety system to handle the wave of ailing people that are crashing out. The government has acknowledged in the National Health Policy, 2017, that every year 6.3 crore people fall into poverty due to health-related expenditure, which is partially undoing the achievements of governments interventions for alleviating poverty. According to the India State-level Disease Burden Report and Technical Paper, there has been a massive increase in largest disease burden on account of non-communicable diseases. It also showed a Disability Adjusted Life Years (DALY) rate increase from 1990 to 2016 for diabetes at 80 percent, and ischemic heart disease at 34 percent. DALY measures years of healthy life lost due to premature death and suffering.
The poor prefer health insurance to life insurance, as they say, we die once but go to the doctor many times each year. By managing risks and avoiding debt those who have insurance policies are in a position to protect the wealth they accumulate, generate more income, and can even get a fair chance to rescue themselves and their families out of the mire of poverty. Universal healthcare in India remains a distant reality because healthcare still ranks very low on the governments priority card, and nobody wants to talk about the elephant in the room. There are presently three popular models of universal health coverage.
A snapshot of Indias healthcare
- 30% of Indians do not have access to primary healthcare facilities.
- About 39 million Indians fall below the poverty line each year because of healthcare expenses.
- Around 30% of people in rural India do not visit hospitals due to fear of the expenses.
- 47% of healthcare needs in rural India and 31% of the need in urban areas are financed by loans or the one-off sale of assets
- About 70% of Indians spend all their income on healthcare and drugs.
- Out-of-pocket spending on healthcare in India, which makes up 69% of the total expenditure on health, is among the highest in the world, and much more than the rates in Thailand (25%), China (44%), and Sri Lanka (55%).
- Nearly 75% of dispensaries, 60% of hospitals and 80% of doctors are located in urban centres.
International state of healthcare
Every year, nearly 30,000 doctors, 20,000 dentists and 45,000 nurses graduate from medical colleges across India. However, the doctor-to-patient ratio in India is only 6 for every 10,000 people. This is far below the rate in Australia which has 1 for every 249, the UK which has 5 for every 1,665, the US at 9 for every 548 and the global ratio stands at 15 doctors for every 10,000 people. Across India, there is one government hospital bed for 1,833 people, which means one government hospital serves 61,000 people.
Globally, India has a laggardly record in its healthcare coverage. In per capita terms, adjusted for purchasing power, the public expenditure on health is $43 a year, compared to $85 in Sri Lanka, $240 in China and $265 in Thailand; European Nations spend 10 times and the United States spends 20 times. According to the Insurance Regulatory and Development Authority (IRDA), the Indian Governments contribution to health insurance stands at roughly 32percent, as opposed to 83.5percent in the United Kingdom. Indias high rate of out-of-pocket expenses for health in stems from the fact that 76 percent of Indians do not have any health insurance.
Indias broken healthcare system
The apathy of the government is reflected in a rather poor prognosis for the health system. Primary Health Centres (PHC) in villages are supposed to screen and feed medical cases to specialised hospitals in districts and further on to state-level specialised hospitals, but PHCs do not exist in many villages, only about 1 for every 20 villages, and where present are so acutely undermanned that the access system is broken at the first mile. As many as 18 percents of PHCs were entire without doctors, impacting not only the filtering of patients but also deeply impairing prevention and early detection, a must if costs in the whole system are to be contained. The only redeeming feature turns out to be the committed cadre of Auxiliary Nurse Midwife, ANM, at PHCs and their sub-centres along with Accredited Social Health Activists, ASHAs.
Though the healthcare facilities have grown significantly in terms of numbers and expertise, this has largely been in the private sector. The governments failure to deliver quality care has led to a rapid expansion of private hospitals, which today account for 93 percent of all hospitals, up from 8 percent in 1947, they account for 64 percent of all beds and 80 to 85 percent of all doctors. However mass access continues to remain a challenge. For the private sector affordability in tier three cities and rural areas is a critical limiting factor for further expansion. A major problem is the disproportionate access to the core of public services between rural and urban areas.
Currently, there are around 734 district hospitals across the country which provides secondary healthcare, additionally, there are around 300 other hospitals like womens hospitals at the district level which are powerful nodes in Indias healthcare network and can be revitalised to boost the health infrastructure. They ought to be strengthened with public investment by supplementing their services from the private sector with a contractual mechanism that can be revoked if the performance is not in accordance with terms.
Healthcare reforms are strongly needed
India also needs to reform the public healthcare sectors governance and management systems. The approach to service delivery has to be a functional referral linkage with established continuum of care across the spectrum from village to sub-health centre, primary health care, sub-district hospital and the district hospitals. A system of universal health coverage should pay for health services from a pooled fund consisting of tax-fund revenues like employer-provided insurance, government-subsidised with social insurance programmes like Rashtriya Swasthya Bima Yojana, RSBY, or other national health insurance programs. There should be a single-payer system at the state level that allows for one to purchase services from private healthcare providers.
Several laudatory policies are already in place with right direction but there is need to accelerate the pace of the journey with a political commitment to protecting and promoting the public healthcare sector. Reforms with hard-coded timelines and accountability of those tasked with the administration can bring about a change. And encouraging the policy doctors to collaborate with the professional doctors, using their ingenuity to find solutions which are affordable, scalable and yet high-quality.
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