High expectations abound for the rollout of the National Health Protection Scheme (NHPS) — also known as Ayushman Bharat or Modicare. As the world’s largest government-funded health programme, the project is nothing if not ambitious. However, will it be the answer to India’s ailing health system?
India has numerous health concerns putting strain on the resources of its health system. The dual burden of infectious disease and non-communicable diseases (NCDs), the lack of infrastructure in rural environments, as well as chronic underfunding at the government level. This has led to a vast majority of India’s healthcare being paid for by the public.
Out of pocket expenditure continues to rise
Recent evidence would suggest that despite increased prevalence of health insurance, out of pocket expenditure continues to rise. This trend is notable even in the last few years. Data from 2014 suggested around 65.6 percent of healthcare expenditure was out of pocket. More recent reports suggest a figure closer to eighty percent.
Payments for health insurance premiums have increased from 5.28 percent in 2013-14 to 6.51 percent in 2015-16. This indicates that either more individuals have been purchasing healthcare, or premium rates have risen.
Some services are available at discount prices, or even for free at government-run hospitals. However, most of Indian healthcare is provided by the private sector. Government run hospitals are typically focused within urban areas and so many individuals will be forced to seek treatment in private clinics simply due to lack of access.
Current estimates put eighty percent of outpatient care and sixty percent of inpatient care in the hands of the private sector. It is believed that out-of-pocket expenditure for services by private hospitals places 55 million Indians into poverty each year.
A recent story in the Financial Times described the predicament of a day labourer whose twelve-year-old son was diagnosed with cancer. The child requires chemotherapy every 21 days. The labourer cannot afford the prices at private hospitals and so has no option but to turn to the public sector.
Issues arise when the labourer and his son have to travel 200 km to the nearest state-run hospital, the medical college hospital of Benares Hindu University. There they can avail the treatments needed free of charge. However, any medications required must still be paid for by the patient.
Mr Rajbhar — the day labourer — earns around Rs 7000 (104 USD) a month when able to work full time. Due to the travelling back and forth between the hospital, he is unable to work some days, with the travel itself costing him in addition to the treatments. Rajbhar estimates that since his son’s diagnosis he has spent more than Rs 170,000 on treatment, wiping out the family’s savings and placing them into debt.
Health insurance, a saving grace from out of pocket expenditure?
Some health insurance schemes are already in place in some areas for those below the poverty line. The Rashtriya Swasthya Bima Yojana (National Health Insurance Programme, RSBY) has been in place since 2008. This scheme aimed to provide Rs 30,000 towards medical treatments. However, the scheme had some considerable flaws.
Overall, out-of-pocket expenditure was not reduced to any significant degree because of the programme, claims a study published in Social Science & Medicine. This is despite RSBY being in place for nearly a decade – a damning finding for a programme that has so far run costs to the government of around Rs 5,000 crore (743.1 million USD).
The scheme, like the state run hospital attended by Mr Rajbhar and his son, only provided treatments for free and did not provide for any necessary medication. In the case of many NCDs that require constant treatment, not only will the Rs 30,000 likely not cover the hospital fees, it will not provide any relief from the consistent purchasing of medicines.
Modicare is far more ambitious, aiming to cover more people and provide a far higher insurance coverage. India’s poorest 100 million households — encompassing around 500 million people — will be covered for up to Rs 500,000 a year. This level of insurance coverage would be of far more benefit to families such as that of Mr Rajbhar.
However, details of the scheme are still being established. At an estimated cost of $1.7 billion USD the scheme will be a considerable financial undertaking. Critically, the plan intends to allow for the insurance coverage to include private hospitals under the scheme. This would open up far more treatment opportunity for those in areas not covered by public hospitals.
Regulation of insurance companies
The scheme will likely include some manner of public private partnership between the government and private health insurance firms. This has been the case with any smaller scale attempts at government assisted health insurance schemes.
The insurance scheme would need to be highly regulated to ensure that a patient can claim for their insurance payout following treatment. Insurance companies in India have been taken to court recently for denying an individual a payout from an insurance policy he had been on for a number of years due to his condition — hypertrophic obstructive cardiomyopathy — potentially being genetically caused.
The insurance company claimed “genetic diseases are not payable as per the policy, genetic exclusion clauses”, though were later overturned in court due to their lack of genetic testing of the man’s condition beforehand. The court thus ruled that without testing they cannot assume genetic cause and so cannot deny payment.
Though the final draft of Modicare is yet to be established, some are reporting that the scheme will cover pre-existing conditions, as well as pre and post-hospital treatment. If this is achieved, the programme could considerably bring down out of pocket expenditure among India’s poor.
However, inadequate infrastructure remains an issue. While in theory an individual may be able to receive treatment for a condition without charge due to the insurance, this does not mean that they will actually receive it. As many rural areas are currently without specialist doctors or facilities to cope with numerous conditions, treatment will still be unavailable to some due to geographic, rather than financial reasons.