Reform structure for universal healthcare

The healthcare system in India is not only plagued with high costs for treatment, but it also suffers from systematic problems that exist on multiple levels. With 75% of dispensaries, 60% of hospitals and 80% of doctors serving only 28% of the population, quality care is concentrated in urban areas. On the other hand, the rural areas receive sketchy healthcare facilities.

The problem is compounded by low health insurance penetration, leaving 86% of rural population and 82% of urban population without cover under any scheme — public or private — to support health expenditure. For those suffering from chronic conditions such as cancer, this quickly translates to huge, unaffordable medical bills.

The need of the hour is a reform in the system to provide Universal Health Coverage (UHC). Developed countries such as Australia, Canada, France, Germany, Singapore, and Switzerland have established systems wherein the government pays for healthcare provided by private companies.

With Ayushman Bharat, the Union government is attempting to provide health insurance of upto Rs 5 lakh to 10 crore families. However, this would only suffice to cover the disproportionately affected as opposed to implementing universal coverage. It also has its own implementation challenges. Executing a similar plan that would be inclusive of every citizen would lay a stronger foundation for healthcare in India.

About 62% of the healthcare costs in India are paid out-of-pocket by the patients, as studies show. In fact, only about 1.5-2% of the healthcare expenditure is paid by insurance. Further, due to lack of universal healthcare, a disbalanced equation is created, where the quality of care received becomes proportional to money spent on it. Given the low per capita income of the country and discrepancies in earnings across demographics, some feel the blow harder than others.

A recent survey by the National Sample Survey Office (NSSO) found that people in rural areas primarily depend on household income or savings (68%) and borrowings (25%) to fund hospitalisation expenses. In cities, people rely on income or savings (75%) to support medical expenses. The survey also found that 1% of the poor in rural areas have to sell their physical assets to meet healthcare expenditure, and more than 5% seek help from friends and relatives. The consensus remains that healthcare expenditures are among the leading causes of indebtedness in India, with millions being pushed into poverty every year.

UHC can resolve these issues by standardising healthcare infrastructure and providing value-based medicine. Despite India being one of the most economical healthcare providers in the world in terms of value proposition, the cost of even cheap healthcare is proportionally huge due to the low per capita income. Unified with discrepancies in quality, this make healthcare inaccessible to many.

Working as an overarching umbrella for all, UHC would lay the groundwork for high-quality care by providing reimbursements basis global standards outcome measures. The cover would also mean that people no longer have to depend on their savings or borrowings to fund medical expenses, and a structure would be instituted with the help of integrated private and public efforts.

Infrastructural shift

The implementation of UHC would require a paradigm shift, such that the government acts as a monitoring agency, tasked with the policy framework and financial aspects, as opposed to the intricacies of the implementation process. The execution, however, should be privatised, with responsibility and accountability lying with the private sector. Such a transition can be initiated from the taluk hospitals set up to provide secondary care.

These hospitals struggle to function properly due to inadequate staff and other facilities. Delay in prepping wards, labour rooms and operation theatres is often witnessed. If the private sector were to take charge of such initiatives, and the government were to act as an enforcement body, the impact of delivery could be drastically altered.

Having a mandatory health cover for all sections of the society would increase the pool of resources and allow cross-subsidy between government and the private sector. A pool of taxpayers’ money can also be created towards the same objective.

The power of judgment, though, must rest with an autonomous insurance entity that can negotiate with the private sector on a reasonable remuneration, making it beneficial for both the parties. Such an approach would provide the healthcare sector in India with a must needed infrastructural reform, significantly affecting the affordability element of accessing quality care. For those suffering from chronic diseases such as cancer, which is incredibly draining on the finances, such a system can be the help they need.

(The writer is Chairman & CEO, HealthCare Global Enterprises Ltd)