By Ravi Duggal
India needs a robust public health system: Health is a public good and it cannot be treated as a commodity. This approach will diminish the role of private sector and eliminate the role of insurance. The Union and state governments together spend Rs 1,800 per capita through the ministries of health, but for bureaucrats and parliamentarians they spend Rs 9,000 per capita via CGHS. This reflects the inequity in provision of healthcare across classes. Another class of people, the lower end of the blue-collar working class with a monthly income limit of Rs 21,000, are covered by statutory social security like Employees’ State Insurance Corporation (ESIC). If you earn more than Rs 21,000, you are out of the ESIC cover.
The Central Government Health Scheme has no upper income limit. Similarly, the defense services spend as much, or probably more, than what the CGHS spends per capita. You have the railways which has a very good public health system. Railways take care of healthcare in their huge colonies, and can be a good benchmark. They spend about Rs 4,000 per capita. Various surveys have shown that if you spend about Rs 4,000 per capita, the government’s budget will be close to 2.5% of the GDP, suggested by the national health policy.
The middle class crisis
The problem is that the middle class is left out of all this. There are three types of middle classes. One gets social security benefits in government or from the Factories Act or the ESIC. Another group of people work in the private sector where the employers pay for health insurance. They are covered by group health insurance policies till they are employees of a company.
I am 64 years and if I have to get a health insurance policy for me and my spouse for Rs 5 lakh, the insurance company will charge close to Rs 45,000-50,000, which I can’t afford because I’m not a pensioner. I live completely out of my savings and am no longer working. Insurance has become very expensive and it becomes even more expensive as you grow older. This demolishes the foundation of the idea of insurance and shows that the design of health insurance schemes in this country is completely faulty.
The insurance paradox
It’s a faulty also because the way it is designed, if you’re covered for Rs 1 lakh, you can get only 1% for the bed where the market is kind of exploding. In India, insurance is basically a mechanism that covers the 4% of hospital beds at corporate hospitals and maybe some of the other larger hospitals. They together have 10% of the hospital beds available in the country. An average pensioner will not be able to afford care in those hospitals if we don’t have insurance cover. If there was no insurance, corporatisation of healthcare would not have happened in this country.
When there were only Mediclaim policies offered by the public sector insurance companies, the occupancy at hospitals, especially the larger ones, was less than 42%. When insurance policies came into the picture, the occupancy goes up to 80-90%. Somebody needs to conduct an audit of these large private hospitals. They have two major sources of income — one is insurance and the other is medical tourism.
As far as insurance goes, a country like India cannot afford the insurance nature of PMJAY, as a lot of fraud will happen. Instead of setting up the health and wellness centers, the second leg of the Ayushman Bharat scheme, you are actually putting money on the insurance part. In this year’s budget of Rs 6,400 crore for PMJAY, there has been no significant increase for the sub-centers across the country.
Kerala is perhaps one example where a little more money was spent because it converted all the sub-centers into family health centers. And I don’t know if that actually increased the budgets, but, since you don’t get a breakdown in the budget document it’s difficult to assess. When you look at India as a whole and across most of the states, out of pocket expenditure has been galloping over the years. And we still don’t have the data for 2021. We may see a sharp rise because of the Covid-19 pandemic where people were forced to seek care in the private sector.
I have been looking at the monthly insurance business reports. My estimate is that health insurance premiums would touch Rs 63,000-65,000 crore in 2021. It was Rs 50,000 crore in 2020. Within health insurance, the government-funded health insurance covers a large number of people — something like 35 crore people are covered by PMJAY and other states schemes. In terms of premium, the government only spends Rs 4,000-5,000 crore in getting health insurance coverage for the below poverty line population.
The shaky foundation of insurance
The foundation of the government scheme is risk pooling. What happens at the ground level in insurance is that if I’m going to need some major surgery or treatment, I will buy as an individual level by insurance. Now I’m at risk, I can have a heart attack, stroke or cancer. When you grow older, you are at greater risk and the insurance premium will gallop. Covid-19 has exposed the fault lines of the public health system.
In the first wave of Covid, India did good firefighting. Public health system is poorly funded and the infrastructure is weak, but the system is capable of good firefighting. That is what the Mumbai Corporation did. We did good firefighting to eliminate smallpox. We are doing some good work to eliminate Polio. Whenever there is an epidemic or pandemic, we respond to it. But we do not create a system of healthcare that will take care of all such issues when they begin to unfold.
Public health system must offer free medicines
I was talking about the three middle classes, and I have explained the two earlier. The third is the 36 crore or probably more, that can neither afford insurance, nor they are below the poverty line. They cannot get benefits from the government. They can afford the day-to-day illnesses and outpatient care. Currently, about 60% of the out-of-pocket expenditure is for outpatient care. So, hospital care is just 30-35%. Within the 60% used for outpatient care, about 80% is for medicines.
If the government can provide free medicines from the public health system, as envisaged by the HLEG report and the 12th five-year plan, that will do a lot of good. When people know that the public system will give free diagnostics and free medicines, the footfall will increase. This has happened in Maharashtra where this community-based monitoring and planning is happening in 16 districts.
Footfall increase because there is pressure from below for the public health system to respond to the needs of people. If people don’t find a particular medicine, they send a message to district officials. When the DHO is flooded with SMSs, he has no choice but to enable that particular PHC or CHC. If we had a good, robust, comprehensive primary healthcare system in this country, you would not have been left in the lurch when Covid-19 hit us.
There’s another outstanding example at Nandurbar where Dr Rajendra, an Adivasi doctor, who had the foresight. The district was not at all affected in the first wave, and did not record a single death. He planned for oxygen cylinders and had surplus oxygen supplies which he gave to neighboring districts. The individual stories are good, but if we have a proper system, then every district will have a similar story to tell.
Again, the data till September 2020 show that Rs 15,500 crore has been paid out since the inception of PMJAY as benefits, both through trust funds or through insurance. But 75% of the payout went to private hospitals. What this means is that public funds are subsidising the private sector by insurance or other modes of financing. There is a tendency for the Ayushman Bharat or PMJAY portal to hide these figures. You see numbers at some corner of a policy brief by the national health authority.
Many departments bring out a fancy coffee table book for annual report with a lot of color, but no substance. This complete lack of transparency is unfortunate. The insurance sector has more transparency as the Insurance Regulatory and Development Authority brings out a decent annual report. I would like more state-wise data, but they don’t publish it. It just tells you that there are four or five states that account for 60% of the premiums, and income.
The poor investment in the public health system is an issue that we need to deal with. And I think unless we do that, we will remain vulnerable to further waves of Covid-19 or other pandemics that may hit us. Our system only has the capacity to do firefighting. We need to double our public investment from 1% of the GDP to 2%. Then you will be able to fill up the vacancies across the country in primary health centers. About 40% of the positions are vacant. How can you run a primary healthcare center if 40% of the doctors and 70% specialists are missing. District hospitals have a shortage of 40% of people.
So how can you run a public health system with such human resource deficits. There are issues that cannot be dealt with in 1% of the GDP. You need to increase the health budget substantially. We need to bring in comprehensive primary healthcare, building on the health and wellness centre concept, because what is missing in the primary healthcare system in the country is robust care in terms of access to medicines and diagnosis.
(Ravi Duggal is a sociologist with over 4 decades work on health policy, systems, financing, budgets, governance and accountability issues.)