Modicare: How effective is the budget plan for the health sector?

By Suranjana Roy

During the budget session, Finance Minister Arun Jaitley launched the Health Care Plan for this financial year. He called for health protection at a more aspirational level, inviting applause for the “world’s largest government-funded health care program”. Critiques of the same have been calling this much ambitious plan a mere promise—an inefficient and inadequate budget allocation which does not uplift the underprivileged. Nonetheless, the current plan is in line with the National Health Care Policy 2017 launched by the Government of India. The current National Health Protection Scheme of the budget has also been dubbed as Modicare.

The National Health Care Policy

Adopted on 15th March 2017, the policy saw an ideological shift from ‘sick care’ to ‘wellness’ in the health sector. It aimed for a comprehensive universal health coverage and quality health care services at affordable prices. These patient-centric schemes focused on evolving diseases and called for increased investment from both public and private sector. Infrastructure development in the health sector formed an integral part of this scheme as it called for an increased number of beds, the transformation of healthcare units to provide improved services, etc. All this was done to uphold one threshold: To increase public health spending to 2.5% of GDP by 2025.

Budget 2018: Major takeaways for the health sector

Health is a major factor in throwing people in dire conditions of abject poverty. About 7% of the population go below the poverty line just because of unforeseen medical conditions. FM Arun Jaitley announced health insurance cover for around 40% of Indians, particularly the poor families, with ?5 lakh per annum for each of the targeted 10 crore families, for secondary and tertiary care hospitalisation.

The government is set to establish 1.5 lakh health and wellness centres under the Ayushman Bharat Program. It receives an allocation of ?1200 crore for providing comprehensive health care, including non-communicable diseases and maternal and child health and diagnostic services. This adds up as the extended version of the Rashtriya Swasthya Bima Yojana (RSBY), which provides annual insurance of only ?30,000 to impoverished families. The two far-reaching initiatives under the Ayushman Bharat seek to enhance productivity and avert wage losses and impoverishment. It will also generate jobs for women. The allocation for the RSBY has risen to ?2,000 crore in FY19 from ?470.52 crore in FY18.

Deeper penetration

With an aim to increase human capital in the field of health, 24 new government medical colleges and hospitals will be set up by upgrading existing district hospitals in the country. This would ensure access to quality education and healthcare, with at least one medical college for every three parliamentary constituencies and at least one government medical college in each state of the country. “We are all aware that lakhs of families in our country have to borrow or sell assets to receive indoor treatment in hospitals. Government is seriously concerned about such impoverishment of poor and vulnerable families,” said the Finance Minister.

Other highlights include: Limit of deduction on health insurance premiums and general medical expenses have been raised from ?30,000 to ?50,000 for senior citizens and an additional allocation of ?600 crores for nutritional support to tuberculosis patients. The government endeavours to give holistic medical care to citizens as people cannot comprehend their demographic dividend until they are completely healthy and free of diseases and terminal illnesses.

Criticisms or suggestions?

Critiques believe that the government’s Health Plan may remain a promise if the budget allocation for the same is noted. The allocation was of ?52,800 crore—a mere increase of five percent from the revised estimate of ?50,079.6 crore in the previous financial year. Overall the expenditure is only 1.2% of the GDP, making India one of the poorest spenders in healthcare in the world. To meet the objectives of the NHP 2017, the government should expand its funding from ?200,000 crore currently to ?800,000 crore by 2025. For this, it needs to increase its budgetary allocation by 20% each year—something the current budget fails to address. The allocation for the National Rural Health Mission fell to ?24,280 crores from ?25,459 crores. Programmes for immunization and control of communicable diseases also fell.

A lot of speculation takes place on the periphery of the insurance policies. The initiatives to increase the role of private sector in healthcare have been highly debated. While some say it’s important to stimulate private investment in the same, opponents feel it will do nothing to strengthen public health care. Former Finance Secretary, Arvind Mayaram, analysed how this scheme could give a major role to private insurance providers and hospitals in healthcare delivery for the poorest. “Universal health insurance through private hospitals has not worked for the poor anywhere. Biggest beneficiaries are the private hospitals and insurance companies. There is no substitute for public health care. More money should have been pumped to strengthen it.” said Mayaram.

Building on past mistakes

Having said this, the gross inappropriate utilisation of funds by the healthcare sector in the past has made the finance ministry sceptical to allocate more funds in the sector. Even at places where funds are properly channelled, substandard and defective health care services are rife. Therefore, the funds allocated needn’t just be paired up with enhanced infrastructure but accountability and responsibility at each level. If the country struggles with poor health, it is unlikely that it meets its development goals. Hence, the budget should be more broad-based. While the details of implementation to the aforementioned schemes aren’t out, the government should prioritize investment in public hospitals, with establishments highly equipped in dealing with medical exigencies. The budget should also look into the regulation of insurance services provided by companies.

Being the last regular budget for the Modi Government, an effective implementation could benefit the average health of the country alongside guaranteeing leverage in the upcoming elections. The already existing health schemes combined with the new ones should ideally help in carrying out better operations in the health sector.

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