More private sector primer than health care pathway

The central government’s flagship health insurance scheme, Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), aims to extend hospitalization cover of up to Rs 5 lakh per family per year to the poor and vulnerable population of about 50 crore people. . Apart from AB-PMJAY and state-level government health insurance schemes, small sections of the Indian population are covered under social health insurance schemes and private health insurance. Recently there has been discussion on the government covering the remainder of the population, commonly referred to as the ‘missing middle’ between the poor and the rich. In this direction, NITI Aayog has recently published a road map document titled “Health Insurance for India’s Missing Center”. However, the report confuses all hopes and expectations of a credible path to universal health coverage (UHC) for India, to say the least.

The report proposes voluntary, contributory health insurance as a key tool for expanding health insurance to the ‘missing middle’, mainly by private commercial health insurers. Government subsidies, if any, will be reserved within the ‘missing centre’ and only for the very poor at a later stage of development of voluntary contributory insurance. This is a major deviation from the approach propounded a decade ago by the High Level Expert Group on UHC, which was skeptical of such health insurance models as UHC instruments and largely tax-financed with private sector participation. Advocated the health system. ,

Patient Care

Even those with a rudimentary health policy savvy will know that no country has ever achieved UHC, relying primarily on private sources of health care funding. Evidence shows that in developing countries like India, with a vast informal sector, contributory health insurance is not the best way forward and can be fraught with problems. But when we look at international examples of the contributory social health insurance model, some very important features emerge, for example, the significant level of government subsidies for the plans; non-profit mode of operation; And some important guarantees for health. The policy report grossly ignores these basic rules.

For hospitalization insurance, the report proposes a model similar to the Arogya Sanjeevani scheme, albeit with a lower estimate of around ₹4,000-₹6,000 per family per year (for a sum insured of ₹5 lakh for a family of five). with premium. There will be a standard benefit package for all, and the sum insured will be between ₹5,00,000 and ₹10,00,000. Insurance will largely be provided by commercial insurers who will compete among themselves.

It is clear how this model differs slightly from commercial private insurance, except for a few lower premiums. These lower premiums are achieved by reducing insurers’ administrative costs through a number of measures, including private use of government infrastructure and possibly switching to less-powerful methods of physician payment.

Most importantly, the low premium is not received because of government subsidies or regulation. One can see how this model is vulnerable to almost every flaw that characterizes traditional private insurance.

For example, consider countries like Switzerland. Despite relying primarily on private insurers and competing models of insurance, some important checks and balances exist: benefits are spelled out in law; Basic insurance is compulsory and not for profit; Cream-skimming and risk-discrimination are prohibited. Such checks and balances are a long shot in the Indian scenario, neither are they discussed in the policy report.

The report suggests enrollment in groups as a means of combating adverse selection. The prevailing per capita expenditure on hospital care is used to demonstrate the affordability of hospital insurance, and thus, the potential willingness to pay for the insurance.

Both of these assumptions are likely to be far-fetched in practice, and are likely to be characterized, despite the wide unfavorable selection of models. It is important to remember that despite a nearly two-decade-old legacy, even free government health insurance for the poor has little access in the country. The potential fate of low premium contributory private health insurance is clear for a target group that is not very affluent.

outpatient care

An even more volatile matter has been made regarding outpatient department (OPD) care insurance coverage, which covers doctor consultations, diagnostics, medications, etc. The report rightly acknowledges that out-of-pocket accounts for the largest chunk of OPD expenses. Spending on health care, as well as health care expenses, play a large role in the impoverishment of families. The report proposes an OPD insurance with a sum insured of ₹5,000 per family per year, and again uses the average per capita OPD expenditure to justify the ability to pay. However, OPD insurance is envisaged on subscription basis, which means that the insured families will have to pay almost the entire sum insured in advance to avail the benefits. This is the last thing that will have any resemblance to UHC.

Clearly, this route is unlikely to lead to any significant reduction in out-of-pocket expenditure on OPD care, which defeats the whole purpose of providing insurance. Any cost savings or benefits due to using a lower-powered physician payment mode and a more integrated and coordinated route of care. However, their contribution is likely to be nominal and may be at least partially offset by the administrative costs involved in insurance. The individual is likely to be largely indifferent to such an OPD insurance plan, especially if it restricts the choice of health care providers.

bad temper

The policy report defies the universally accepted argument that UHC plays a strong and pervasive role for government in health care, particularly in developing countries. Rather than setting a path for UHC in India, the report is more about the footprint and expansion of penetration of the private health insurance sector.

Furthermore, the report seeks to achieve the elusive UHC with few or no financial implications for the government, which is an absurd idea by any stretch of the imagination. This kind of disposition is extremely disappointing after COVID-19. The National Health Policy 2017 envisages increasing public health spending to 2.5% of GDP by 2025. Let us not contradict ourselves so quickly and at this critical juncture of an unprecedented pandemic.

Dr. Soham D. Bhaduri is a physician, health policy expert and editor-in-chief of the indian businessman