The insurance model of healthcare promoted by the government is questionable, particularly so in the backdrop of the current global pandemic that has exposed the inadequacies of our health system.

A man gets his spo2 checked with an oximeter as two healthcare workers in ppe stand before him File PTI
Voices Opinion Saturday, July 31, 2021 - 12:25

“We need to make insurance a revolution,” said Harsh Vardhan, then Union Health Minister on the launch of the National Assurance Mission in 2015. His stance is ironic – a comprehensive approach to healthcare that an assurance model guarantees has been reduced to the provisioning of one of the many components. Even then, 56% of India’s population remains outside the purview of insurance. 

The insurance model of healthcare that the former Health Minister has promoted is questionable, and is particularly so in the backdrop of the current global pandemic that has exposed the inadequacies of our health system – understaffed public healthcare with weak infrastructure and suboptimal quality of services.  This is the result of years of government policy which has prioritised privatisation of healthcare on one hand and provision of secondary and tertiary care with high-end curative services on the other. Primary healthcare which brings comprehensive healthcare – from promotion and prevention to treatment, rehabilitation and palliative care – as close as possible to the home has been deserted. In fact, the Planning Commission in 2011 had observed that expenditure in secondary and tertiary care was diverting attention from primary healthcare services. 

Moreover, public health services which includes food safety, vector control, water and sanitation and health education etc.,and is widely acknowledged to prevent and reduce the exposure of the population to diseases has been neglected.

Fallout of misplaced priorities

The repercussions of the lack of attention given to the primary healthcare system has been that India currently has a shortfall of 43,736 sub-centres (23%), 8764 Primary Healthcare Centre (PHC) (28%) and 2865 Community Healthcare Centres (37%). Against the World Health Organisation (WHO) recommended standard of five beds per 1,000 people, the Indian figure stands at 0.54 beds per 1,000 people in government hospitals. Child nutrition and low-birth weights, high rates of neonatal and maternal mortality; growth in non-communicable diseases such as obesity and diabetes, and tobacco use leading to cancer and other diseases are a few health challenges that are yet to be resolved. The high disease burden in the country is also the result of public health initiatives being deserted along with primary healthcare.

The impact has been unequally felt the most by the poor and the marginalised population who are stuck with two difficult choices – an affordable but sub-optimal and understaffed public healthcare system or the exploitative private system while incurring catastrophic expenditure. The rich, however, have the means to afford high-end formal, private hospitals for their healthcare needs. India hasn’t been further from achieving universal health coverage. Data from National Sample Survey Office (NSSO) shows that 67% and 73.8% spells of ailment in rural and urban areas respectively are treated in the private sector.

Although health policy experts pushed for higher resource allocation on the state health programmes, politicians needed quick tangible results that investment in long-term health programmes can’t provide. As such, the concern that the existing paradigm of health was responsible for the poor results, and the fact that the private sector had already gained a strong foothold led to the idea of increasing “public funding for the purchase of private health care, implemented through health insurance companies”. Instead of fixing the loopholes in the existing paradigm and making healthcare equitable, the government chose the insurance model as a way to achieve universal health coverage.

Loopholes in the insurance-based model

As of 2020, there are 49 state-government financed insurance schemes (GFHIS) and eight central GFHIS, the latest one being the Pradhan Mantri Jan Arogya Yojana. These schemes are also being promoted as a way to reduce the out-of-pocket expenditure (OOPE) of patients. However, the insurance schemes with its limited coverage of inpatient care is ineffective in reducing out-of-pocket expenditure which is mostly incurred from out-patient care. This is particularly difficult for the poor who spend a considerable amount on outpatient care, particularly drugs. Among out-patient medical expenditure, the most is incurred on medicines (70.3%), followed by doctor’s fee (13.3%) and diagnostic tests (12.6%). Medical poverty owing to high OOPE increased from 32.5 million in 1999–2000 to 55 million in 2017. 

An insurance model of healthcare in India while deferring attention from a comprehensive and equitable primary healthcare has also failed in providing financial risk protection to its poor and marginalised population. Only 12.9% of the rural population and 8.9% of the urban population are covered under a GFHIS. It, therefore, raises serious doubts on the capacity of insurance schemes alone to achieve universal health coverage when the challenges of the country’s weak public healthcare system, the unregulated private healthcare and the ever-increasing inequalities in health among different population sub-groups and regions remains unaddressed.

The way out

The insurance schemes can only be a component of a larger, holistic and equitable healthcare model which makes quality, public healthcare affordable to all, despite their ability to pay. The assurance model, not the one that former minister Harsh Vardhan suggested, but one that goes beyond health financing. It is all-encompassing in its approach which would strengthen the service delivery of public healthcare from infrastructure, drugs, equipment, effective health information system to financial risk protection. It would have a strong foundation of primary healthcare. The rich already have world-class healthcare at its disposal. There is a need to ensure that the poor and the marginalised can access quality and affordable healthcare as close to their homes as possible.

The limited scope and coverage of the insurance schemes cannot address the all-encompassing requirements of universal health coverage. It is through a comprehensive assurance-based model of healthcare with strong foundations in primary healthcare that inequalities in health can be reduced and healthcare made accessible and affordable to all sections of the population. It is only then that the goal of “Health for All'' can be truly achieved. 

 Mayurakshi Dutta works as a qualitative Research Assistant with Oxfam India. She is interested in gender, sexual rights and policy.  

Topic tags,
Become a TNM Member for just Rs 999!
You can also support us with a one-time payment.