Public health

Health care hoax

Print edition : March 02, 2018

A view of the general ward of Swaroop Rani Medical College Hospital, Allahabad. Photo: RAJESH KUMAR SINGH/AP

While increased spending on health care is essential, the new health insurance scheme announced in the Union Budget with the grandiose plan of universal coverage fails to take into account the mixed experiences with similar schemes envisaged in the past.

IN March 2017, when the National Democratic Alliance (NDA) government cleared the National Health Policy (NHP) after a gap of 15 years, there was much anticipation as it held the promise of universal access to quality health care by “prioritising the role of the government in shaping health systems”. It was stated that the road map of the new policy was “predicated on public spending and provisioning of a public health care system that is comprehensive, integrated and accessible to all”. It also proposed raising the public health expenditure to 2.5 per cent of the gross domestic product (GDP) in a time-bound manner and allocating two-thirds of the resources to primary care followed by secondary and tertiary care.

Notwithstanding the grand architecture of NHP 2017, health schemes announced in the Union Budget for 2018-19, with their narrow objectives, seem to have been crafted keeping in mind the Lok Sabha elections in 2019 and half a dozen State Assembly elections later this year. The focus on health care in the Budget has less to do with the motto of “prevention as cure”: it lays emphasis on the curative aspects of health sans allocation. In a marked departure from the fundamentals of a similar policy promising universal health care in the previous Budget, Finance Minister Arun Jaitley announced a new health insurance scheme, the National Health Protection Scheme (NHPS). Calling it the world’s largest such scheme, he promised insurance cover for 100 million households with an allocation of Rs.5 lakh for each family. According to a subsequent media briefing by the NITI Aayog, the households had been identified through a Socio-Economic Caste Census on the basis of deprivation points. It was to be a targeted scheme, insuring a certain percentage of the population in the event of their hospitalisation.

On the face of it, the scheme sounded grandiose and appeared to be in response to the huge out-of-pocket expenditure on health care needs in a highly privatised health care system. However, it turns out that resources have not been allocated for the scheme and there is nothing universal or “national” about it, catering as it does to a section of the population, albeit the needy one. Moreover, there is only a modest, a 2.7 per cent, increase in the health budget: from Rs.53,198 crore in 2017-18 (Revised Estimates) to Rs.54,667 crore (budget estimates). The allocation as a percentage of the Union Budget has decreased from 2.4 per cent in 2017-18 to 2.1 per cent. More importantly, there is a 2.1 per cent decline in the allocation for the National Health Mission, the country’s largest primary health care programme. Likewise, the 7 per cent cut in the allocation for the Swachh Bharat Mission is surprising given the government’s mass media campaign promoting Swachh Bharat as a step towards Swasth Bharat (healthy India).

Interestingly, in the 2016-17 Budget, the government had announced an earlier avatar of the NHPS with a health cover of Rs.1 lakh for “poor and economically weak families”. There is no reference to it in the 2018-19 Budget. The cynicism about the NHPS is not without some basis. The expenditure burden of the NHPS, referred to as “Modicare” and “Namocare” by some Ministers and a section of the media, targeting 500 million people or 100 million households, is to be met in a 60:40 ratio (Centre and State contributions respectively) and a 90:10 ratio (for hill States). The total estimated budget for this is around Rs.10,000-12,000 crore at a premium of Rs.1,000-Rs.1,200 per family to be paid for by the government. However, with the bulk of the health delivery system in secondary and tertiary care in the private sector, it is evident that the provisioning of the services will be done by private practitioners and subsidised by the government.

The “new” scheme has failed to take into account the mixed experiences with the Rashtriya Swasthya Bima Yojana launched in 2008 or its 2015 avatar, the Rashtriya Swasthya Suraksha Yojana, which assured a coverage of Rs.30,000 for selected families, the success rate of which has been low in terms of the actual beneficiaries covered. It is estimated that some Rs.370 billion has been spent since the inception of the RSBY in 2008. The Budget speech dealing with the NHPS failed to mention that many State governments, especially those in the south, had their own equivalent health insurance schemes.

Despite the grandiose announcement, it was apparent that the finer details—discussions with State governments with regard to the financial responsibility expected of them, diseases covered, and the timing of the launch of the scheme—were yet to be worked out. While there was no clarity initially on the date of the launch of the scheme, the media were informed later that it would coincide with Gandhi Jayanti. “The idea is, one nation: one scheme,” said a NITI Aayog official. This government agency seemed to have more information than the Health Ministry, which is the nodal Ministry for the scheme. A PowerPoint presentation by NITI Aayog, the contents of which were not provided to the media, mentioned that State governments had the option of implementing it in a “trust” mode or with the help of insurance companies. The insured amount that had “no cap on family size” would cover treatment at secondary and tertiary level care, which clearly meant that the NHP’s commitment to devote the bulk of the resources (and effort) to primary care was not to be.

Wellness centres

The Budget has earmarked Rs.1,200 crore for health and wellness centres, the new name for sub-centres that will be upgraded to deal with non-communicable diseases. These wellness centres, which will focus on lifestyle diseases, will be managed by paramedics and not full-fledged doctors. Sub-centres at present cater to a population of 7,000-7,500 people, and are ill-equipped.

While allocation per sub-centre is low, less than Rs.80,000 per sub-centre (the government plans to convert 1.5 lakh sub-centres into wellness centres with a total allocation of Rs.1,200 crore, which works out to approximately Rs.10 per capita, which is less than the per capita expenditure on health in neighbouring countries), the government failed to address the issues of staff shortage, especially trained doctors, and upgradation of primary health care centres for inpatient treatment.

NITI Aayog officials said in reply to a question that the “doctor-led model cannot work” and that mid-level professionals would be created, more on the line of paramedics. The National Medical Council Bill, it was explained, provided for bridge courses, which would allow homeopathic and Ayurvedic doctors to prescribe allopathy medicines. There was also mention of nurses being trained to administer basic medical treatment apart from routine inoculations. It was another matter that the NMC Bill, seeking to replace the Medical Council of India with a new body, has been found faulty on many counts. This has not stopped the government from going ahead with its health delivery plans.

A NITI Aayog member said the idea was to model “Modicare” on the lines of the United Kingdom’s National Health Service under which each individual is assigned a dedicated general practitioner. What was not mentioned was that while the U.K. scheme was free, barring some charges and payment for optical and dental services, regardless of one’s ability to pay, the general practitioners at the centres, called “surgery”, were trained medical doctors and not paramedics. Secondly, the share of the private health sector in the U.K. is small. It is estimated that less than 8 per cent of the population uses private health care services, which are viewed as a “top-up” to the scheme. The allocation and expenditure is met from taxation and not predicated upon any contribution from the private sector.

The inspiration to call the NHPS “Modicare” on the lines of Obamacare, or the Affordable Care Act (ACA), begins and ends with the similar sounding nomenclature. The ACA began as a universal health care system but due to opposition to the “single-payer universal care” concept, it evolved into a system that targeted the poor who could not afford private insurance. “Modicare” is hardly universal in the first place. The ACA imposed higher taxes on high-income groups and required larger companies to provide insurance cover to their employees. The United States has one of the most expensive and privatised health care systems in the world. The ACA did not take off after Barack Obama ceased to be President.

One of the ways that the Indian government plans to meet the extra expenditure on health insurance without increasing the health budget is by increasing the cess on education and health from 3 per cent to 4 per cent, which health economists say is grossly inadequate for the provisioning of affordable health care.

India’s health care sector is hugely privatised. According to the National Health Accounts (2014-15), expenditure by government health care providers accounted for about 23 per cent. Expenditure on pharmacies accounted for 29 per cent of the Current Health Expenditure by both private and public health providers. With out-of-pocket expenditure on health at 62 per cent, the government-announced insurance cover would seem reasonable. Diagnostic tests themselves constituted 10 per cent of the out-of-pocket expenditure on health. More importantly, under the Clinical Establishments (Registration and Regulation) Act, 2010, and the Clinical Establishments (Central government) Rules, 2012, clinical establishments in States and Union Territories are expected to charge the rates for each type of procedures and services within the range of rates prescribed by the Centre. The Act is applicable in only 10 States and Union Territories. The focus on providing insurance cover in secondary and tertiary care rests on a faulty understanding of the degree of hospitalisation.

According to the National Sample Survey Office (71st Round) “Health in India” report, only 4.4 per cent of urban and 3.5 per cent of the rural populations are hospitalised in the reference period of 365 days. The highest proportion for hospitalisation in both areas (excluding childbirth) is for preventable diseases. Cardiovascular and gastrointestinal diseases are common in urban areas. Inpatient treatment, as other literature reveals, is dominated by the private sector. This also means that the bulk of the hospitals are in the private sector. Some 72 per cent of the total medical expenditure for non-hospitalised treatment is spent on medicines in rural areas and 68 per cent for the same in urban areas. On an average, the rural populace spends Rs.5,636 for hospitalised treatment in a public hospital and Rs.21,726 in a private hospital; their urban counterparts spend Rs.7,670 and Rs.32,375 respectively. There are huge inter-State variations. Compared with this is the premium of Rs.1,000-Rs.1,200 per family for a year for a total coverage of Rs.5 lakh.

Lack of access to services and financial constraints force people to seek treatment without medical advice. Given the poor success rate of the RSBY, the government should not have gone ahead with the NHPS. Despite the RSBY’s coverage of Rs.30,000, its utilisation was poor. Only 12 per cent of urban and 13 per cent of the rural populace in the unorganised sector were brought under the RSBY. Eighty-six per cent of rural and 82 per cent of urban population were not covered under any scheme of health expenditure support. The expenditure for hospitalised treatment was reimbursed partially or fully in only 6 per cent of the cases in urban areas: the highest was 12 per cent in Maharashtra.

No reduction in expenditure

In a paper titled “Impact of Publicly Funded Health Insurance Schemes on health care utilisation and financial risk protection in India: A systematic review” (PLOS; February 2, 2017, by Shankar Prinja, Anup Karan and others), the authors conclude that there was no reduction in out-of-pocket expenses among the enrolled households after the implementation of the health insurance scheme. Although utilisation of services had gone up, there was no substantial evidence of reduction in out-of-pocket expenditures or improvement in financial risk protection. “The benefits of these demand-side financing mechanisms will not be reaped unless the basic health care infrastructure for delivery of primary health services is strong,” the paper says, citing the examples of the U.K., Thailand and Mexico. The primary health care infrastructure can serve as “gate-keeping for specialist services”, it says.

The increase in utilisation was concentrated in private sector hospitals. “These two findings imply that it is not only likely to impose fiscal constraints on the government for sustainability of the schemes but is also expected to divert large amounts of tax-based public money towards the private sector.” The authors pose an interesting conundrum and point to the dangers of the “siphoning off of the public sector demand to private sector for the provisioning of these services”, especially where the government itself has been found to be strengthening supply-side resources through flagship health programmes and providing more public sector facilities. The rationale for funding hospitalisation costs through public health insurance may need to be revisited as 70 per cent of overall health expenditure is on account of outpatient care, which is not covered. Even so, poor utilisation of insurance schemes could well be due to the concentration of private empanelled hospitals in urban areas. The benefits are cornered, by and large, by the richer quintiles of the urban population, which are more aware of the schemes. “No such demand-side health financing scheme can succeed in providing financial risk protection in the absence of a strong primary health infrastructure,” the paper says, adding that as rural and disadvantaged areas “have not seen the growth of the private sector, there is significant merit in the role of investing to strengthen the public sector infrastructure”. There is also a dearth of robust evidence on the impact of these schemes on the health of the population, the paper says.

The paper evaluated studies that had assessed financial risk protection, the impact of the RSBY as implemented in some of the States. Broadly, the incidence of catastrophic health expenditure had gone up. Private facilities were preferred by both RSBY beneficiaries and State-level health insurance schemes. Findings from Gujarat, Uttar Pradesh and Haryana showed that private facilities were used under the RSBY. The rates of hospitalisation were directly proportional to the distance of home from the health facility. Those who lived 30 kilometres away had lower inpatient rates. One other important finding from the evaluation reports sourced by the authors of the paper is what they call the inequitable nature of the enrolment and utilisation. Insurance companies had an incentive to enrol fewer than the maximum number of 5,000 household members as the premium payment was linked to the number of households enrolled rather than members. Villages with a higher proportion of below-poverty-line population had poorer enrolment, the review found.

The insurance schemes need to be monitored and evaluated in view of the large private sector presence, which, the authors say, has an incentive to induce demand, and the intermediary purchaser or insurer will have “perverse incentive to reduce utilisation through cream skimming”. The study concludes that publicly financed health insurance schemes are not the panacea to achieve universal health coverage in India. There is enough evidence to show that increased spending on health care is needed. Publicly funded and poorly managed health insurance schemes are not the answer for a number of reasons: the most important one is that they do not reach the intended population.

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