Calls for universal health coverage: Rethink insurance route

While there have been calls for expanding Ayushman Bharat, the better alternative is to increase spending on public healthcare.

Calls for universal health coverage: Rethink insurance route
The High-Level Group on health advising the 15th Finance Commission is looking at it as a medium-term measure.

By Soham D Bhaduri

The Covid-19 pandemic has exposed the fault lines of Indian healthcare. This has strengthened calls for universal health coverage (UHC) in the country as a long-term reform. In this regard, there seems to be an emerging consensus around expanding coverage through Ayushman Bharat–Pradhan Mantri Jan Aarogya Yojana (AB–PMJAY), which currently insures nearly 50 crore poor citizens for hospitalisation expenses. The High-Level Group on health advising the 15th Finance Commission is looking at it as a medium-term measure.

In 2019, the NITI Aayog endorsed similar vision. Some recent measures like Maharashtra universalising its state health insurance scheme, free Covid-19 testing/ treatment under AB–PMJAY and ‘express empanelment’ to encourage private sector participation in AB–PMJAY, could be a prelude to universalisation of health insurance. Recently, the Director-General of WHO also recognised Covid-19 as an opportunity to speed up Ayushman Bharat with emphasis on primary care.

In ideal conditions, universal health coverage would extend to legions of currently uninsured citizens and reduce financial barriers to care, both over a short period. It could also help bring a large chunk of private healthcare under the public ambit, reduce informality in healthcare provision, pave the way for better regulation and oversight, and allow monopsonistic power to the state to negotiate for better and affordable care. It may also contribute to reducing regional disparities in healthcare services and fostering the adoption of cost-effective healthcare innovations. We shall now delve into the cons.

A noteworthy finding from the covid-19 pandemic is how the public sector comes in handy during times of crisis. The observation that states with higher per-capita public health spending have tackled Covid-19 better attests to this. It is also important to note that private healthcare interests aren’t particularly aligned with managing infectious diseases and emergencies. Private hospitals under health insurance often prefer high-paying, non-communicable disease-related interventions . The private sector’s sluggish response to Covid-19 under AB–PMJAY till date could be evidence of this.

While the lesson from the pandemic is to strengthen public healthcare, the insurance route to UHC could further weaken the public sector. Private providers would likely comprise an unduely large proportion of empanelled facilities, and public providers, with their weak infrastructure, are bound to lose out. Given the prevailing ethos of encouraging private-public partnership in already decrepit public facilities, the ruin of the public sector would be almost certain.

Expanding AB–PMJAY to the uncovered population through premium collections would be precarious given our huge informal sector. There is enough to indicate that such contributory systems fail to work in high informal-sector settings. The only workable option would be general revenue financing.

Schemes like AB–PMJAY could then only spend ‘more’ and purchase ‘less and worse’. This has been evident from the experience of earlier schemes like the Rashtriya Swasthya Bima Yojana. Typically, under-regulated private-sector-led insurance models fail to address the problem of the impoverishing out-of-pocket expenses on health, and do little to address issues of equity and access. They also envisage large, unfruitful administrative expenses and pervasive malpractices.

Public-funded health insurance in India originally began as a populist measure to quickly expand healthcare to vulnerable sections and make a visible impact, conducive to electoral returns. The subsequent adoption of such schemes by various governments was driven by this ability to generate quick, visible results while disregarding concerns about long-term returns and ramifications.

It is necessary to avoid getting carried away by such notions of convenience and political expediency, particularly since decisions taken now could resound for a long time to come. While there is a need to carefully rethink the insurance route to UHC, the pandemic has indicated that strengthening public healthcare is unquestionably indispensable. Not only can a robust public sector enable mounting an effective response to future emergencies, but even if the insurance route is opted, it can provide a counterweight to the private sector through its efficient functioning.

The author is Mumbai-based doctor, and healthcare commentator. Views expressed are personal

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First published on: 12-06-2020 at 06:00 IST