The promise of good health

Jayshree Sengupta

The proposal of putting a cap on the profit margins of private hospitals in drugs, consumables and devices by the Delhi Government seems to be a good one, especially when the ghastly case of a big private hospital charging the parents of a child Rs 16 lakh after she died from dengue, is still fresh in our minds. Private hospitals are known for many types of malpractices like overcharging for syringes, gloves and medicines; often making it compulsory for patients to buy medicines from in-house pharmacies. The patient and attendants are at a loss about what to do when presented with a highly inflated bill. Other states may follow suit, but putting a cap on the profits of private hospitals will not solve the deeper malady of lack of affordable healthcare in India.

Unless the supply of public hospital facilities are enhanced and improved, private hospitals will keep overcharging the public because they are forced to go to them. As a result, the ‘out-of-pocket expenditure’ of patients in India is one of the highest in the world, at 62 per cent. As many as 70 million people sink into poverty each year due to the burden of healthcare. Monitoring profits of private hospitals is also not easy, especially when there are many ways of evading the regulatory authorities’ scrutiny.

We know that many public hospitals in big cities have excellent doctors and surgeons, but we are not able to access them. Why? This is because of the absence of good medical facilities in villages and towns. If the primary and district-level healthcare centres are good and well equipped with doctors and medicines, many patients would not have to come to big cities for treatment. The cost of public healthcare would also go down if patients are treated nearer their homes, as timely treatment is important to avoid complications and the need for secondary and tertiary care.

The reason for inadequate healthcare is the low government spending on health services, which have remained below 2 per cent of the GDP, at 1.4 per cent. Healthcare is bandied about as a great election issue in state elections because health is a state subject, but little is done afterwards.

Universal Health Coverage (UHC), which focuses on free healthcare for all citizens of a country, has been a talking point for some time. It exists in the UK, the EU, Canada and many other countries. Under the UPA government, a high-level expert group — under the chairmanship of Dr Srinath Reddy — presented a detailed action plan in its report on the UHC. The Reddy report pointed out that the government expenditure on health had to be increased to 2.5 per cent of the GDP. The emphasis was on “prevention” and primary healthcare, which is usually neglected, and even undermined, by the usual system of health insurance. The government, according to the report, should be the guarantor of UHC and should be linked with the right to health, as it converts an aspirational goal into an entitled phenomenon.

The UHC would depend on general revenues for financing rather than an unsteady stream of contributory health insurance which in most cases offers incomplete coverage and restricted services. The idea of the UHC was, however, abandoned by the Modi government, and instead, the Anshuman Bharat National Health Protection Mission (AB-NHPM) was proposed in Budget-2018. It is a grandiose plan of guaranteeing up to Rs 5 lakh in treatment to around 500 million people on the payment of a premium for their health insurance. The scheme is an important breakthrough in healthcare, but without adequate hospital beds, doctors and nurses, any health scheme with such a large-scale coverage will remain a pipe dream.

There can be many glitches in the NHPM’s smooth functioning that covers 10 crore families belonging to the poor and vulnerable population based on the socio-economic caste census (2011), and aims at benefiting 40 per cent of the population. It will subsume other existing insurance schemes like RSBY and senior citizen health insurance. The beneficiary will be entitled to cashless hospital services from any public or private empanelled hospital across the country.

The expenditure incurred on premium payment will be shared between the Central and state governments. The Centre’s share will be Rs 10, 498 crore and states will spend Rs 6,219 crore over the next two years. There will be different cost structures for different states, and therefore, the premium outgo per family in each state will vary.

According to a study by FICCI, India’s public health expenditure has to go up to 3.7 per cent to 4.5 per cent of the GDP for the scheme to be successful (the global average is 5.9 per cent). There will have to be more hospital beds (from the current 0.9 beds per 1000 persons) and additional 9 lakh doctors for primary healthcare and 1.2 lakh specialists in secondary and tertiary care. In 2017, there were only a little over 10.22 lakh doctors in the country, amounting to less than one doctor (0.59) per 1000 population. The WHO prescribes a minimum level of 1 doctor per 1000 population.

How efficiently the insurance companies will function in collecting the premiums and how well they will be able to cope in checking fraudulent claims is yet to be seen. The Health Ministry has proposed that the companies will have to mandatorily refund excess premium if the claim ratio turns out to be less than 85 per cent under the scheme to ensure that insurance agencies do not have windfall gains.

On the whole, successful medical claim management by the companies and timely reimbursement to hospitals will be a challenging task. There will have to be accurate documentation in all hospitals — a difficult task at all times. Insurance companies will need a large-scale experienced workforce in the field of claim management, which will require specific expertise. Biometric identification of the beneficiary may help plug leakages.

Many more problems will surface as the scheme gets implemented, but the government has to make it work because it has promised affordable healthcare to nearly half the population. It can’t go back on its word now.