Healthcare is a scarce resource in developing countries, the access to which is limited by the failure of governments to develop a network of basic healthcare facilities, or affordable private facilities.
Healthcare is a scarce resource in developing countries, the access to which is limited by the failure of governments to develop a network of basic healthcare facilities, or affordable private facilities. The poor and rural communities are least served, because they also lack the supporting infrastructure like roads, drinking water, sanitation, etc. The failure to provide affordable and suitable health cover has negated efforts of governments to reduce poverty. One major illness in the family is sufficient to pull the entire household back into poverty and deplete the capital that took years to accumulate. The National Health Protection Scheme (NHPS) announced by the government in its FY19 Budget could potentially become the centrepiece to achieve universal health coverage, provided that a few implementation issues are resolved successfully upfront. The major problem facing the government is the financing of universal healthcare and the infrastructure to support its delivery. Even at a modest coverage of `200 per person and for a household of five, the total cost for 10 crore households would be Rs 10 lakh crore. A more realistic (higher) premium would require financial resources that far exceed those announced by the government. It should be recalled that, currently, outpatient care costs (which far exceed inpatient costs as a share of total health costs) are borne by the patients. That the Rashtriya Swasthya Bima Yojana (RSBY), which covered only hospitalisation and barely 3-5 persons per thousand, could avail of this cover points to the fact that people want coverage of outpatient cost and would be willing to pay something for health insurance that covers both outpatient and inpatient costs. Therefore, the health insurance programme needs to be designed with an understanding that those people who pay a contribution will benefit from the government subsidy for health costs. This will create a two-tiered financing model, which is the international standard.
The model followed by RSBY and insurance companies has been to apply a standard package across India (one-size-fits-all concept). This is based on the tacit fallacy that all people are exposed to the same risk mix, and therefore a universal solution would suffice. This misconception has led to unpopularity of health insurance programmes. To align the local community’s interest with the health insurance coverage, the packages must be context-relevant, based on community involvement and the model of ‘say on pay’, i.e. community voice on local priorities, paid for by contributions of members. Each community would develop its micro insurance unit (MIU), with a responsibility to engage members in consultations on context-specific benefit packages reflecting local perceptions about risk exposure and local ability to pay. Where people understand the programme and agree that the benefits are relevant for them, they would be willing to contribute money, information and other resources. It is necessary to encourage the creation of community-based MIUs and develop the technical assistance to such implementing agencies. As the purpose is to reach uninsured households, it is most suitable to leverage the wide networks of over 85 lakh Self-Help Groups (SHGs), and more than 90,000 credit societies, cooperatives and similar associations. They are well-structured, well-managed and capable of handling public funds, and they have been active for years mostly in rural and informal sectors. MIUs are ideal implementers because they can create a one-stop shop, delivering access to (health) insurance with long-term presence at grass-roots level.
MIUs can put in place the infrastructure to collect contributions in small instalments. The money so collected would be managed by MIUs. The incentive to enrol voluntarily with MIUs will be strengthened by the application of ‘have a say on pay’ principle for mutualised risks. The three distinct advantages of this approach are: risk coverage would be decided according to local requirements; the risk of fraud/false claims would be reduced because everybody in the local community would be well-informed about sicknesses in a family; and as members will be contributors to the MIU, they would be resistant to misuse of funds and would be vigilant that costs of medical treatment are reasonable. The community, through MIUs, would fulfil the basic requirement of covering health risks as decided collectively. Since members would be contributors, they would exert sufficient pressure to avail the legitimate benefits within the agreed limits. The model for doing so has been tried and tested successfully in several pilot locations in India, with compelling results regarding insurance education and technical assistance to create a governance structure for risk management at the community level. The health delivery system is the responsibility of state governments. NHPS could then also leverage the insurance, education and claims settlement mechanisms, which will be operated at the grass-roots level, at a lower cost and better flow of information.
The lower costs of administration will flow from hiring staff at village level (after being trained in the needed skills), which would be much cheaper than concentrating the administration in urban settings, as well as by liberating NHPS from ‘first rupee’ claims. State governments could leverage funds from skill development to train local persons to provide support to MIUs. These MIUs could be federated right up to the state level to provide infrastructure, technical and education support without having any right to interfere in the local decision-making. Prima facie, this model of health coverage could take some time to develop and establish itself, but once the people associate community participation with benefits (in health coverage, agriculture and livestock insurance), and benefits with paying a contribution, there will be the foundation for broad-based social security framework at rural settings and in the informal sector. Those who expect that remotely-managed health coverage would bring quick results should consider the experience with previous programmes, as well as in the (very low) voluntary uptake of the Pradhan Mantri Fasal Bima Yojana. NHPS offers a unique opportunity to innovate, by harnessing best practice lessons from many. There is a large community of experts and specialists with field experience in India, standing by to assist NHPS succeed.