An uphill task
The daunting task of covering a wider population under health insurance could only be achieved by involving the private sector
The WHO defines universal healthcare as a system where "all people and communities can use the promotive, preventive, curative, rehabilitative and palliative health services they need, of sufficient quality to be effective, while also ensuring that the use of these services does not expose the user to financial hardship." Universal healthcare and health insurance are two sides of the same coin.
Less than 500 million Indians are said to be covered under health insurance. Indians top the BRICS group in out-of-pocket health expenses, shelling out 31 percentage points more than the group median of 34.6 per cent, as reported in a study by the Lancet. It is also estimated that around six million people are pushed below the poverty line every year solely due to rising costs of medical expenditure. It is unmistakably one of the major reasons for widespread poverty. The low-income groups are more susceptible as poverty has an inseparable relationship with malnourishment and disease. India still has a long way to go in achieving universal coverage of health insurance and thereby saving a greater part of out-of-pocket expenses (which is 65 per cent of their incomes).
Social health insurance began in the last century with two mandatory and contributory schemes: Central Government Health Scheme (CGHS) and Employees State Insurance Scheme (ESIS). While the former caters to the health needs of Central government employees the latter is meant for low-paid industrial workers. But these two schemes cover only a minuscule of the population and are far from perfect due to poor government health infrastructure, lack of choice for best private hospitals, exclusion of rural habitations and, employer's apathy in the dissemination of information. Rashtriya Swasthya Bima Yojna (RSBY) launched in 2008, included BPL families and expanded the coverage. It was more accommodative in terms of pre-existing diseases, OPD plus hospitalization, cashless treatment in private hospitals, smart card facility, etc. The scheme won accolades from the UN, World Bank, and ILO as one of the world's best social healthcare programmes.
The Ayushman Bharat (PM-JAY) launched in 2018 is a landmark in the evolution of health insurance in India, especially for BPL and weaker sections. In one year, 10.3 crore e-cards have been issued to entitled beneficiaries and of the hospitals empanelled 53 per cent are multi-speciality private hospitals. Surely the coverage of the intended 100 million families in the near future is not an insurmountable task given the promising progress the scheme registered in the last two years. It's miraculous that up to a cost of Rs 5 lakhs a patient can get free treatment in tertiary care with a choice of provider.
However, Ayushman Bharat (PM-JAY) has teething problems. As the scheme reflects a shift from supply-side financing to demand-side financing, the coverage is increased but not everyone is covered. Fixed packages with no flexibility for spillover expenses in treatment demand the out-of-pocket expenditure. Patients with chronic illness were denied admission and the scheme covers only 30 per cent of hospitalisation charges. It does not provide out-patient department care support, which is as expensive as in-patient care. Fraudulent empanelment of below standard providers and unethical malpractices by private hospitals are also alleged. It is reported that average weekly claims have decreased by 51 per cent last year at the peak of the pandemic. Unviable rates, delayed payments and geographical disparities are additional problems.
The insurance needs of middle-income sections in the country are largely looked after by the private sector today. There are problems such as limited delivery network, insufficient data on disease patterns, limited choices, poor coverage for younger people, high claim ratio, varying treatment costs and lack of standardization and accreditation. Focus on innovations in products and pricing, building more healthcare infrastructure and exchange of information are important. The low- and middle-income sections (non-BPL classes) constitute a vast chunk of the workforce in the services sector which contributes more than 50 per cent to GDP and their health insurance has a direct bearing on production and income generation activities. Perhaps more coordination is necessary between the IRDA, TPAs, the insurance ombudsman and the providers to streamlining the process.
A peep into the western world may help us devise effective strategies in the Indian context. In Australia, the government subsidises the premiums for all private health insurance cover. France works on 'solidarity' ('the more ill a person becomes, the less he pays') with 85 per cent population enjoying complementary private health insurance. In Germany, 86 per cent of the population is covered by compulsory statutory health insurance and the remaining by private providers. The Netherlands meets expenditure on universal compulsory insurance through 'equalisation' pool fund which is a mix of contributions from employer (50 per cent), government share (five per cent for those who cannot afford), and 45 per cent from premiums paid by the public. In Switzerland, health insurance is compulsory and uniform for the entire country. The system is a combination of public, subsidized private and, totally private systems. The UK has National Health Service (NHS) that provides free health coverage to all citizens. Private health insurance is used hardly by eight per cent of the population generally as 'top-up'. In the US, 69 per cent of adults have private health insurance coverage. But the 'Obama Care' (The Affordable Care Act) in 2010 came as a game-changer making medical insurance compulsory for all.
PM-JAY is certainly a 'giant leap' towards universal health insurance but it needs improvisation by filling the gaps in the delivery mechanism. Issues related to health infrastructure, geographical disparities, digital divide and fraud must be addressed regularly. States have freedom in choosing either the trust mode, insurance mode or a combination of both. Some states have allowed even APL beneficiaries too. Such flexibility should be extended to club existing local schemes with PM-JAY.
It is difficult for India to scale up spending on health from the current two per cent of the GDP to the levels of advanced countries (10 per cent -15 per cent) overnight. Rather a pragmatic approach involving the private sector to ensure the maximum expansion of coverage is all that's practically possible in the short run. Reforms in both sectors are necessary, with the public taking greater control over the private. The creation of basic public healthcare infrastructure should continue as an uncompromisable priority.
The writer is a former Additional Chief Secretary of Chhattisgarh. Views expressed are personal