Ahead of the Budget for 2023-24, 15th Finance Commission chairman N K Singh on Tuesday suggested a slew of measures for the health sector, such as the inclusion of middle-class households in the flagship Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY) scheme, a Uniform Health Code and a dedicated financial institution for the sector.
To realise the potential growth in the health sector and to provide for universal health coverage, Singh said health needs to be shifted to the Concurrent List of the Constitution from the State List to help develop cohesive national policies for the development of the sector and boost health expenditure to 2.5% of GDP by 2025 from around 1% now.
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“The PMJAY was an enormously positive development. But, universalisation of health insurance will be of great value in addressing what people call the ‘missing middle’; not rich enough to take private insurance, not poor enough to qualify otherwise,” Singh said speaking at industry body CII’s Health Summit here.
According to a Niti Aayog report unveiled in October 2021, at least 30% of the population, or 400 million individuals – called the missing middle in this report – are devoid of any financial protection for health. The PMJAY launched in September 2018, and State Government extension schemes, provide comprehensive hospitalization cover to the bottom 50% of the population or around 700 million individuals. Around 20% of the population or 250 million individuals – are covered through social health insurance, and private voluntary health insurance.
PM-JAY offers Rs 5-lakh-a-year free health cover to 107 million poor households (accounting for 40% of the population). Given that the upcoming Budget will focus on social sector issues, the government will likely extend the PM-JAY health cover for a nominal fee to the middle class families to help protect them from health-related expenditure shocks, sources had told FE earlier.
It is crucial to regulate the health sector to ensure the quality, standard of care and the assessment of service providers and hospitals for holding them accountable. “Just like in the case of the Securities Market Code announced in the last Budget, I am beginning to wonder, why can’t we have a uniform health code which will make an enormous difference to pharmacology, dentistry and some of the other things which are suffering from a myriad of conflicting regulations (of the Centre and states)?”
Judging from what happened in the Covid pandemic, Singh said health should be made part of the Concurrent List of the Constitution, which will enable many of these harmonizations of laws and many of the uniform standards to evolve.
Singh said there is no getting away from the fact that public outlays in the health sector need to be substantially augmented to reach 2.5% GDP by 2025. The public expenditure (30% by the Union and 70% by states combined) on health as a percentage of GDP in India has been around 1% of GDP whereas, much below the global peers. States, except Meghalaya, are spending less than 8% (a reasonable level) of their budget on the health sector, with the average being 5.18% in 2018–19.
There was a need to set up a dedicated development financial institution, which would facilitate access to requisite finances for the private sector to harness the enormous opportunities in this area, Singh said referring to the fact that similar financial institutions have been set up for housing, agriculture and even tourism.
Singh also said there was a case for constituting an All-India Medical and Health Service, as envisaged under Section 2A of the All-India Services Act, 195, for better administration of the sector.
Among others, he said the MBBS curriculum needs restructuring, making it competency-based. The asymmetry in the distribution of medical colleges in different parts of the country needs to be addressed.
What Singh Says:
Need a Uniform Health Code to harmonise, rationalise and streamline the multiplicity of Acts and regulations between Centre and States
Bring health into the Concurrent List of the 7th Schedule of the Constitution to make the Centre’s intervention more meaningful
Need a development financial institution for the health sector to facilitate access to finances for the private sector
Set up All India Medical and Health Service for better administration of the health sector in the country