Successive governments at the Centre and states have promised health covers for the poor. The intent is laudable, and possibly electorally rewarding. But the key challenge is to design a robust financial edifice to make such plans sustainable. That’s what the craftsmen of the Budget’s new National Health Protection Scheme
) must ensure.
The NHPS promises to cover 10 crore poor households, or 50 crore people, for hospital care. Every family would get a yearly cover of Rs 5 lakh for free treatment. One estimate puts the insurance premium at Rs 2,000 a family a year, taking the cost to Rs 20,000 crore, of which a slice would be borne by states.
The estimate has been contested. Insurers, too, would want to underwrite health policies only if they are priced realistically. The cost could vary, depending on the quality of hospital infrastructure, competition and governance in each state. Strengthening primary and secondary care will lower the burden. A cooperative model where the group pays a small premium and the insurer acts like the fund-manager is one option. Leakages can be curbed if the group is empowered and made to pay, say, a marginal share of the premium. But the US’ purely insurance-driven model is not ideal. A better way is for government to spend money prudently to buy private care, and shift steadily to accountable care.
Aarogyasri, Andhra Pradesh’s fully state-funded health insurance scheme, touted as one of the best in India, was insurance-driven to start with. AP tied up with a private insurer, and empanelled private and public hospitals. The insurance model floundered, and the state has since been buying care from private hospitals and reimbursing them against the free services provided to patients.
Concerns over malpractices, of course, call for proper regulation. Most state-sponsored health insurance schemes also leverage public and private healthcare facilities for hospital care. This makes sense as government can’t afford to provide for all healthcare.
Tertiary care largely covers diagnostic procedures, hospitalisation, surgeries and associated treatment. Rates for each of these are prefixed after assessing costs and compensating providers. Other schemes can provide additional data to arrive at informed estimates of what the NHPS rollout would cost. But the real challenge lies in the availability of health infrastructure: hospital beds, doctors (mainly specialists), healthcare staff, diagnostic facilities, pharmacies, etc. Equally important is the administration of hospitals.
Due diligence in procurement, focus on the quality of care and outcomes, and tight regulation to curb misuse are a must. This, in turn, calls for efficient health administrators, bureaucracy and political will. Southern states like Tamil Nadu fared relatively well in managing government health schemes as they already had a well-established system and a vast pool of specialists, doctors and trained heathcare staff through investment in medical education.
Public, private and trust facilities have come up over the years to meet the demand. Many northern states, especially the Empowered Action Group states, lag significantly in health indicators. Facilities and manpower are far less in terms of beds per thousand and doctors and specialists per lakh population. So, the challenge of implementing the scheme is vastly different here.
Throwing too much money too soon may run the risk of the National Rural Health Mission (NRHM)-like scams where the money did not reach the intended recipients. NHPS, supposed to subsume assorted state-sponsored health schemes, must be rolled out in phases with due checks and crosschecks. Funds for the scheme must be linked to actual performance.
Public debate often masks the complexity of public policy and the needed reforms in India’s health sector. We need to move concurrently on many fronts. Emphasising only tertiary care will not do. GoI should strengthen public facilities at all levels, and drastically increase public spending on health. There should be no zero-sum game, with NHPS undercutting budget or focus on ongoing programmes to combat, say, tuberculosis or mother and child care.
A robust public health system will strengthen state governments’ bargaining position to buy services from the private sector. But it would be foolhardy not to leverage capacities created in the private sector. Technology and data must be used, and R&D encouraged. Drugs procurement must be done in bulk to get volume discounts. Ideally, the accountable care model will work well for even the quasiuniversal healthcare scheme. This would entail GoI paying a per-capita amount upfront to the hospital to take care of patients, and reward doctors and hospitals for outcomes. Actuarial expertise can be used to estimate the per-capita amount the provider has to be paid. Since care providers must ensure quality outcome from their fixed per-capita fee, there will be no incentive on their part to inflate costs. Aregulator for hospitals is an idea is just what the doctor prescribed.