Health Insurance Financing

Health Insurance Financing

Access to quality health services has remained an abiding challenge for India. Given our complex socio-economic reality and disparities in the quality and availability of health services, the need to focus on health financing is an important economic and social imperative. The key to increasing access to quality health care in India lies in increasing the patient’s ability to pay. The only sustainable way to do this is by increasing insurance cover because price capping, in a country that already enjoys the lowest prices, is simply not sustainable.

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The gaps

Health coverage is the target of most health insurance schemes. The unfathomable fact, however, is that adequate and comprehensive coverage for a range of services and diseases remains elusive. Curative- and invasive-interventions, such as surgeries and inpatient care, are covered in most public health insurance policies. However, in spite of non communicable diseases (NCD) being held responsible for 60% of all deaths in India, health insurance schemes seem unprepared to meet this disease burden. The absence of coverage for outpatient care and pre-existing diseases is now an impediment to a comprehensive and affordable health insurance cover. Similarly, coverage for diagnostics and health tests remains patchy. A recent study by Brookings India, “Health & Morbidity in India: Evidence and Policy Implications”, indicates that the latter has been the largest contributor to health expenses in urban India.

The country has witnessed a significant increase in health insurance coverage across population groups, but this is not nearly enough. The Brookings study indicates that in the decade from 2004 to 2014, the number of Indians insured increased from 55 million to over 350 million. The coverage went from 1% of the population to 15% within a decade. While universal health care through insurance remains some way down the road, the increased coverage is still welcome. India accounts for some of the lowest health insurance coverage among developing and low and middle-income countries. This, along with very low health spends, as a percentage of GDP, has meant that over 7% of the population is pushed to poverty on account of catastrophic health-care expenditures. This is not only unacceptable but also wholly addressable.

Need for incentives

The current scenario in the country suggests there is a dire need for a movement towards incentives for health coverage. With most incentivised health insurance schemes, premiums are included in the list qualifying for standard deductible. However, this does not benefit the non-tax paying population. Clearly, health coverage needs to be re-evaluated and health insurance needs to become a part of a broader social security bouquet. Similarly, innovative social insurance models also need to be explored.

At present, a lot of funds are being earmarked for creating infrastructure. While this is important, it limits the availability of funds for health financing schemes and the only solution is to implement a long overdue increase in health-care budget allocation.

Besides focussing on health insurance, we must add quality and outcomes to the important considerations on which a 21st century health system for India is to be created. As the Brookings Study indicates, catastrophic health expenses continue to rise in India, something that India can ill afford. But price control or even increased insurance coverage cannot address this and other challenges. Focus on quality, outcomes and reliability, coupled with greater budget allocation for health care, must all be central to our combined efforts for an accessible, equitable and effective health system. Lastly, weakening our commitment to intellectual property rights ultimately serves to delay the advent of the newest medications and technologies. A recent study by the Commonwealth Fund on drug pricing in the U.S. vis-à-vis 10 other high-income countries suggests innovative centrally negotiated cost control measures and expansion of insurance cover as more effective measures to reduce out-of-pocket spend and control costs.

Dr. Karan Thakur is a medical doctor and an administrator in the private sector. This Article was published in The Hindu Newspaper.

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