Decent healthcare for all

If the recommendations on poverty standards submitted by the Rangarajan committee are accepted, India will have 10 crore poorer people, who according to the previous Tendulkar panel were able to break the barriers of poverty. Ironically, a small reduction in daily consumption can push people from neo-middle class to the poverty zone. For many, just one incident of severe illness in the family can trap generations in indebtedness. Adding to the injury is the lack of suitable healthcare cushion offered by the government. India is a classic case of low public spending on health --- 1.3% of the GDP --- accounting for 1/3rd of total healthcare expenditure.

Consequently private out of pocket (OOP) expenditure is around 70% and is the highest in the world. This could change as the Modi government is contemplating the idea of providing universal health insurance. Health Minister Harsh Vardhan also once mentioned about the government’s intention to start a universal health insurance program drawing some inspiration from America’s Obamacare. However, following the American model to attain universal healthcare could trigger the booby trap of ‘cream-skimming’ and rent-seeking behaviour. Secondly the American model is not the most optimal one which makes a strong case for us devising our own plan. 

America is still experimenting with various models of healthcare delivery and financing in a century old system that is dominated by private health insurers. It first started with the idea of pre-paid care for a group of 1,500 teachers at Baylor Hospital in Texas in 1929. This covered the hospital expenses of the teachers and in some way marked the beginning of the Blue Cross and Blue Shield plans. In 1965 the American government commenced the health entitlement programs namely Medicare and Medicaid, which provided health benefits to the elderly and low-income individuals. Now, almost 22% of America’s federal budget is utilised by these money-guzzling programs. Afterwards, the Nixon administration succumbed to the insurer’s need to jack up the profits and hence came up with the Health Maintenance Organization (HMO) Act in 1973. This model of healthcare focused on cost cutting and laid heavy restrictions on insured and providers using managed-care techniques of authorisation, capitation and Out of Pocket (OOP) expenses. On the contrary people were made to believe that the Managed Care model was brought in to improve the healthcare delivery offered to Americans. The Clinton administration focused on portability, accountability and administrative simplification and later the Bush administration pushed for consumer ownership through health savings accounts (HSAs). Till date the American healthcare system continues to grow under the shadow of private insurers and despite spending the highest per capita on health, American healthcare has been ranked below other industrialised and developed nations in terms of quality care, access, efficiency, equity and healthy lives. 

President Obama is burning the candle at both ends to reform the American healthcare system in a slew of measures under the Affordable Healthcare Act or Obamacare. Obamacare focuses on creating robust health exchanges that would offer cheaper plans to millions of Americans from open health markets. It also seeks to end the ongoing discrimination based on gender, health status, or age. Still, the Congressional budget office estimates that 31 million Americans will still be uninsured. 

After Independence, India followed the Beveridge model of healthcare financing that focused on using tax payers' money for the healthcare services and programs. With its population rapidly expanding and the government’s low spending on public health, the delivery at health centres started becoming substandard and inadequate leading to mushrooming of private health centres without proper checks and balances. National Rural Health Mission (NRHM) has been one concrete and visible effort by the government that brought significant improvements in the health indicators of the citizens but was inadequate in looking at out appetite for investment in public health. 

Alternatively, we had some exposure to social insurance in form of Employee State Insurance Corporation (ESIS), Central Government Health Scheme (CGHS) and Rashtriya Swasthya Bima Yojna (RSBY) emerging prominently in the last few years. With the opening up of the insurance sector, private insurers have also ramped up their coverage to almost 25% of the population. 

While most of the English colonies have favoured the National Health Services (NHS) or Beveridge model, many Latin American countries like Mexico and the Honduras have used national-low cost insurance programs to find success. India too has found some success in state sponsored insurance schemes like Rajiv Arogyasri in Andhra Pradesh and Kalaignar in Tamil Nadu. These programs have covered almost 80% of the population including those above the poverty line. However, there is evidence to suggest that such insurance programs have observed an increase in claim ratios, frauds and abuses by the parties involved. In these schemes the mean hospitalisation expenses for the inpatient and outpatient services are much higher than what it would cost the uninsured or those under private health insurance. In case of private insurance contracts also, health insurers are bleeding with a near 100% claim ratio. 

What India can learn from the US experience is to make better use of IT and ITES services. Health companies in the US have mandatorily invested in technologies with a focus on automating the claims and eligibility system, reducing the paperwork and creating electronic health records. Secondly, a strong accreditation process and reliable agency like National Committee for Quality Assurance (NCQA), which looks at range of measures for quality management and performance criteria. This could mean reforming the Medical Council of India (MCI) and its functioning.  Finally a uniform industry standard for reporting data on care and services provided. 

High Level Expert Group (HLEG), which was established by the Planning Commission, advised the government to use general taxation as the principal source of healthcare financing rather than engaging insurance companies to purchase healthcare services on behalf of the government. Irrespective of the model followed, the government must strongly focus on creating a robust primary healthcare system and make provisions for distributing essential drugs free of cost. 

“Acche din” for the citizen will come when healthcare for all will not be a luxury anymore, but a service to the people and for the people. 

Arun Yadav is a two-time Loksabha MP and former Union minister @mparunyadav. Anurodh Jain is a social healthcare analyst @anurodhj