ABOUT: Despite growth in public and private hospitals, and primary care centres, and increased sophistication in medical insurance products, the poor in India still have very little access to proper medical care as compared to those in developed countries. What is the solution? K. Srinath Reddy, President, Public Health Foundation of India, looks at the way ahead for universal health insurance in India.
Globally, over 100 million people are pushed below the poverty line every year, while nearly 250 million people incur catastrophic out-of-pocket spending (OOPs) on health care. In India, nearly 50 million people are impoverished and about 150 million incur catastrophic expenditure because of unaffordable health care. The need to provide protection against such financial distress and increase access to affordable health care has led to the rise of health insurance. Most countries recognise the value of a healthy population for economic development and several others legally recognise the right to health of all individuals. Accordingly, insurance systems have evolved to manage an individual's health event and associated payment by pooling risks across the population and paying collectively prior to the event (prepayment). Insured individuals and families cross-subsidise health risks among themselves, by creating a large pool of premium payments from which only a few draw when they fall ill. Thus at any time, the 'healthy' subsidise the 'sick'. Larger the pool, greater the potential for spreading risks. A large pool also allows society to reap the benefit of predicting the average cost.
Many welfare-oriented rich countries provide insurance cover to their populations. Even a number of low- and middle-income economies provide financial risk protection to people at large, where governments spend a larger share of their tax revenues to deliver health care services. As a consequence, health outcomes are more robust and people do not suffer financial hardships due to OOPs. In such tax-funded health systems, the rich subsidise the poor and the risk pool comprises the whole population. Though this is not usually designated as a health insurance system, the insurance function in this case is implicit, because prepayment (through taxes) and risk-pooling (whole population is covered) are the underlying principles. In countries where social health insurance dominates, the insurance function is explicit. Global evidence demonstrates that tax-funded government health systems and contributory social health insurance are equally effective in terms of achieving better health outcomes and providing financial risk protection.Until 2007, India had only two large fragmented health insurance schemes - the Central Government Health Scheme (CGHS) and Employees' State Insurance Scheme (ESIS). CGHS benefits are available to all central government employees, with a minimal contribution from the employees, while a large share of the payment is made by the central government through budgetary allocations every year. The ESIS is a typical social health insurance programme, wherein the employees, employers and the government together contribute to a fund, which pays to provide both inpatient and outpatient care benefits to the enrolled employees and their dependents. Community-based health insurance programmes in India provide limited benefits and are often unsustainable because of a smaller risk pool of contributors and limited-paying capacity of individual community members. Since informal workers dominate (92 per cent) the workforce, scaling up contributory social insurance (through salary deductions) would take decades.
In view of a large informal workforce, both central and state governments in India had to step in. In 2007, Andhra Pradesh came up with an insurance programme, where the premium was entirely funded by the state government. The insurance company, in turn, began purchasing tertiary hospital-based surgical care from both private and government facilities. The following year, the Centre introduced Rashtriya Swasthya Bima Yojana (RSBY) but confined the benefits to secondary care hospitalisation, which entailed lower costs. The Andhra Pradesh model was followed by Tamil Nadu, Karnataka, Maharashtra and Gujarat. Most state government-funded insurance schemes expanded their ambit to cover the poor and a large part of the middle-income population, which was vulnerable to health care-related financial shocks. Population coverage of these schemes ranged between 40 per cent and 70 per cent, with Andhra Pradesh covering the most. RSBY, on the other hand, has been largely confined to people who are below poverty line (BPL). Health benefits were offered by RSBY to the extent of `30,000 per annum for a family of five on a floater basis. The state government-funded health insurance schemes offered higher benefits with a ceiling of Rs 1.5 lakh to Rs 2 lakh per annum.
A central objective of these schemes is to provide access to hospital care along with financial risk protection. Evidence from the national level survey conducted by NSSO during 2014 suggests that the utilisation of hospital cover provided by RSBY has been limited to about one-fourth of all secondary hospitalisation episodes among the poor and vulnerable sections. Several micro-level studies and evidence from the large sample survey conducted by NSSO indicate that the financial benefit to households has been very limited, despite some health benefits. Poor households in India, despite such schemes, are still paying for their overall health care. Catastrophic spending, a critical indicator to measure financial risk protection, did not decline among those who are covered by government-funded health insurance schemes. The principal reason for the failure of such schemes in providing financial protection lies in the limited benefit packages offered by the programmes. The focus of RSBY and other government-funded health insurance schemes is to provide access to hospital care. On the other hand, households in India incur nearly two-thirds of their OOPs while accessing outpatient care, especially on medicines. Expenditure on outpatient consultations, diagnostic tests and medicines are not covered by these schemes. Only about 16 per cent of all essential medicines are under price control.
A major limitation of the government schemes lies in their fragmentation of care, since primary care is neither covered nor connected to more advanced secondary and tertiary levels of care. Comprehensive and continuous care, and essential attributes of a good health system are absent. Private insurance is usually reluctant to cover primary care, because it involves a wide range of common conditions with many potential claims. If the government also shies away from primary care in its health insurance schemes, health care will be incomplete in population coverage, grossly inadequate in service coverage and defective in cost coverage. This deviates from all principles of Universal Health Coverage (UHC) which India signed up to in September 2015, as part of the Sustainable Development Goals (SDGs).
Providing appropriate health care of assured quality at affordable cost to all people is the objective of UHC. The poor and other vulnerable sections not reached by the existing health services do require special attention under UHC. At the same time, health care costs need to be contained. Scaling up significant investment in primary health care and assuring the supply of essential drugs would reduce the need for hospitalisation. Such measures would not only improve access to overall health care but would also prove to be cost-effective and pro-poor. Robust rural and urban primary health care services will significantly reduce OOPs of households by attending to common conditions and providing preventive and early-care close to home.Countries that have achieved good health at a low cost, such as Sri Lanka and Thailand, have taken the primary health care route as a key pillar of health system strengthening. These countries now boast of having achieved good health outcomes comparable to those even in rich economies. They have also been able to provide significant financial risk protection. Models of integrated care, which seamlessly connect primary to secondary and tertiary care, and contain health care costs by optimally utilising primary care for prevention and a gatekeeper function for appropriate referral, exist within both public health care and private insurance systems across the world. The Kaiser Permanente system, which operates in some parts of the US, combines an insurance role with a provider network and creates a financial incentive for keeping people healthy and avoiding complications that require high cost procedures. Unless a strong primary care system is effectively connected to the public and private providers of secondary and tertiary care through a UHC framework that integrates all government-funded health insurance schemes, we will not be able to reap the medical and financial advantages of integrated care. The payment system, too, should change from a fee-for-service model that pays for every visit or procedure to a fixed annual service fee that encourages prevention in clinical practice and cost containment through preserving health.
There is now an opportunity for different states to develop such models, given the promise of greater resources and autonomy through the devolution that follows the fourteenth Finance Commissions recommendations. This would also need the Centre to play an enabling role, because RSBY will continue to be centrally administered and it must ensure that portability of UHC entitlements is protected as Indians travel across states for employment, education or leisure. Ideally, all central- and state-funded insurance schemes should be integrated to provide adequate coverage for standardised secondary and tertiary care that stands on the firm foundations of comprehensive primary care. Merging all central- and state-funded insurance schemes (including those for the Indian Railways) will greatly expand the risk pool and enable greater financial protection. Some sections of the middle class may join the rich in opting out of this system, preferring to seek private care and pay out of their own pocket. Private health insurance will be attractive to this small segment as it expands with economic growth. Nevertheless, in a progressive tax system, those who seek this route will continue to cross-subsidise the poor who will derive the benefits of tax-funded public health care and government-subsidised health insurance. To make this happen under a framework of UHC, the Centre and the states must collectively increase investment in health and develop a concerted action plan for delivering quality-assured integrated health care with pro-poor emphasis, leaving adequate room for state-specific adaptations and innovations. That will be the true test of cooperative federalism. ~