The recently-introduced National Health Protection Scheme (NHPS) in the Union Budget 2018 is expected to offer health coverage to millions and is claimed to be the world’s largest public health insurance plan. While the finer details of the scheme are yet to be available, NHPS is expected to be a game-changer in improving healthcare access to the rural masses. However, for implementation, this scheme needs diverse mechanisms. In an interaction with BV Mahalakshmi, Kanchana TK, director general of the Organisation of Pharmaceutical Producers of India (OPPI), said that increasing public expenditure in healthcare to at least 2.5% of GDP is critical and a necessary measure. The right to healthcare is a fundamental right and the right to provide basic public health facilities is the fundamental duty of the state. Excerpts:
National Health Protection Scheme (NHPS) is a grand idea. What should be the essential components of the scheme and how can it improve access to healthcare?
One of the highlights of the Union Budget 2018 is the National Health Protection Scheme. Most health insurance schemes are essentially designed to finance hospital care, while a large proportion of healthcare services consumed by ordinary people is domiciliary. This could prompt insured families to postpone a visit to the doctor until the ailment is serious enough to warrant hospital admission. When most people insured wait to get hospitalised, the premium paid is proportionately inadequate to the claims paid out. Anticipating this, the general council of insurance companies has written to the Union government that the average premium of Rs 1,000 per insured family could prove inadequate in the medium- to long-term. India lacks standard protocols of treatment for various common diseases. This would help to ensure that quality of care is uniform throughout the country and enable the insurers to estimate the value of individual claims. To ensure access, the NHPS needs diversified financial mechanisms to maintain the corpus for healthcare. Simply relying on one element like premiums would not be sufficient as medical inflation and claim ratios make it unviable and unsustainable for insurance companies over a period of time. While the right to healthcare is a fundamental right, a right to provide basic public healthcare facilities is the fundamental duty of the state.
What has been the experience of other countries that have introduced a universal health coverage?
In the UK, there is a single payer system, wherein the government funds universal healthcare from taxes. Healthcare providers are government employees and the healthcare services are government provided. Countries like Germany use the health insurance model. It is mandatory for everyone to buy insurance, either via employer or the government. Some of the best systems are two-tier systems. Countries like France and Singapore adopt a mix wherein government pays for basic health services, and funds that through taxes. The US also has an interesting mix. It uses a single payer model for the elderly and the poor. The middle class receives private insurance that is significantly subsidised by the government. Implementation of universal health coverage in 32 out of the 33 developed countries has been rather successful; if we do this right, and we can, it will improve our healthcare index manifold.
There have been various estimates about how NHPS is likely to be funded. Since OPPI has held views on financing of healthcare, what in your view would be the biggest challenges?
Clearly, a significant increase in public health expenditure is essential and the government will likely fund at least a part of the proposed NHPS. India’s spending on healthcare is 4% of its GDP, of which a little over 1% is public expenditure. That’s among the lowest in the world. According to a WHO report, 62% of healthcare expenses are borne out of pocket. A 2015 report by IMS Health also recommended that taxes on tobacco products, for example, be earmarked for funding healthcare. Several studies, including findings from the World Bank and WHO show that greater public spending on healthcare has a positive impact on GDP growth. Healthcare expenditure is an investment that yields valuable returns, rather than a cost that drains our resources. No matter how we model different schemes, increasing public expenditure to at least 2.5% of GDP is a critical and necessary measure.
The universal health scheme allows for an innovative design of the NHPS. Can you share one idea on what NHPS should consider at the drawing board stage?
The NHPS is meant to cover in-patient incidents, out-patient incidents are largely unregulated in India. It is not uncommon for us to self-medicate and buy over-the-counter (OTC) medicines. The NHPS should carefully consider reimbursement options and ensure that OTC medicines are not reimbursed and thereby proportionately using healthcare funding that is better employed in treating more serious conditions. While designing the NHPS, in parallel, the government needs to have a robust OTC guideline that will improve access and meet one of the WHO objectives of educating people about the risks of self-medication.