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Credit where credit is due. The flagship health insurance programme launched by the Modi government in Budget 2018 is a good first step towards providing health coverage to all. However, where is the money? The new scheme is an extension of the Rashtriya Swasthya Bima Yojana (RSBY), which has been allocated Rs 20 billion (Rs 2,000 crore) in Budget 2018. A sum of Rs 10 billion (Rs 1,000 crore) was allocated to RSBY in Budget 2017 and the revised figures for 2017-18 stood at Rs 4.70 billion (Rs 470.52 crore). Compare this to the Rs 3.02 trillion (Rs 3,02,425 crore) spent by Indians out of their pockets on health in the year 2014-15.
A serious illness can be a crushing financial burden for a vast number of Indian families, with out-of-pocket expenditure (OoPE) constituting well over 50 per cent of the country's total health spending. With the flagship National Health Protection Scheme, which Finance Minister Arun Jaitley was quick to dub as "Modicare" being announced in the Budget 2018, families could get a relief from high health costs, even as the government takes a "step towards providing universal health coverage".
The Modi government has taken several decisions to bring down the cost of healthcare and to make it more accessible to millions of Indians, even as sensational cases of high medical costs, coupled with deaths caused by negligence, have rocked the country.
With an estimated 500 million beneficiaries, the "world's largest health programme" will provide Rs 500,000 in health insurance cover per family per year to 100 million families. Further, the finance minister informed that he was allocating Rs 12 billion (Rs 1,200 crore) for free drugs and diagnostic tests. These benefits are to be provided through the creation of 150,000 health and wellness centres. Of particular note is the fact that tertiary services will be covered under the protection scheme.
Tertiary health care refers to the third level of the health system where specialised consultative care is provided -- usually on referral from primary and secondary medical care. These include burn treatment, cardiac surgery, cancer management, neurosurgery, and complex medical and surgical interventions.
Indian households suffering under out-of-pocket expenditure on health
However, beyond the anecdotal evidence of Indian healthcare's poor state, what are the hard figures that have prompted the government to opt for a programme entailing such an expenditure? As a recent article cited, one estimate suggests that OoPE on health adds around seven percentage points to the country's poverty figures.
The Budget is in a giving mode to farmers, women, poor families, health, and education. That is good news because, according to National Health Accounts, 2014-15 (NHA 2014-15), 62.6 per cent of the country's total health expenditure was OoPE by households, which stood at Rs 3.02 trillion (Rs 302,425 crore), for the year 2014-15. Further, private health insurance expenditure was Rs 177.55 billion (Rs 17,755 crore), or 3.7 per cent of total health expenditure, for the year 2014-15. Government health expenditure's share of total health expenditure stood at 29 per cent.
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Social security expenditures on health, which are finances allocated by the government towards payment of premiums for Union and state government-financed health insurance schemes (Rashtriya Swasthya Bima Yojana and other state-specific health insurance schemes), employee benefit schemes or any reimbursements made to government employees for healthcare purposes and social health insurance scheme expenditures as a percentage of total health expenditure stood at 5.7 per cent, according to NHA 2014-15. These expenditures indicate the "extent of pooled funds available for specific categories of population", the survey explained.
High costs a deterrent
The new scheme covers tertiary care, which is often the most expensive when it comes to medical expenses.
How costly can certain critical medical procedures be? In 2012, Business Today reviewed a tariff list approved by the General Insurers' Public Sector Association (GIPSA). The list pegged the average cost of coronary artery bypass surgery at Rs 140,000-180,000 (Rs 1.4-1.8 lakh) in 2011-12, while the cost of angioplasty was Rs 150,000 (Rs 1.5 lakh).
In 2016-17, per capita income of Indians stood at Rs 103,219.
Stating that increasing institutional deliveries was "an important factor in reducing maternal and neonatal mortality", the National Family Health Survey (NFHS-4, 2015-16) said that 79 per cent of live births in the five years before the survey was delivered in a health facility. However, out of the most common reasons for not delivering in a health facility, 16 per cent of women said it costs too much.
The survey said: "The average out-of-pocket cost paid for delivery for the most recent live birth among women age 15-49 who had a live birth in the five years preceding the survey that was delivered in a health facility was Rs 7,938. The average cost was five times as high in private health facilities (Rs 16,522) as in public health facilities (Rs 3,198)."
A basket of health initiatives emerges
The RSBY offers medical insurance of up to Rs 30,000 for a family of five living below the poverty line. However, according to a recent IndiaSpend report, it has not led to any reduction in OoPE by its 150 million beneficiaries. Low enrolment, inadequate insurance cover and the lack of coverage for outpatient costs are reasons its failure, said the report while citing a study. The programme is limited to inpatient treatment or hospitalisation.
The other initiative is the Pradhan Mantri Jan Aushadhi Yojana, the government’s flagship project promising drugs at affordable prices. Launched in 2008 as Jan Aushadhi Scheme under the UPA regime, it was renamed Pradhan Mantri Jan Aushadhi Yojana or PMJAY by the current NDA government. "With over 3,000 Jan Aushadhi Centres under 'Pradhan Mantri Jan Aushadhi Yojana', medicines are available at 50 per cent to 90 per cent cheaper than branded drugs available in the market. This is making healthcare affordable and encouraging 'Ease of Living'," Prime Minister Narendra Modi said in the 40th episode of his 'Mann Ki Baat' radio programme.
Then there was the push for generic medicines. Last year, the country's apex medical regulator, the Medical Council of India, warned doctors of action if they failed to adhere to its guideline on prescribing drugs only in generic names and writing prescriptions legibly.
Further, schemes such as the Pradhan Mantri Jeevan Jyoti Bima Yojana, a government-backed life insurance scheme, and Pradhan Mantri Suraksha Bima Yojana, a government-backed accident insurance scheme, will now be expanded to cover the lower strata of society.
While presenting the Budget 2018-19 in Parliament, Jaitley stated that the Pradhan Mantri Jeevan Jyoti Beema Yojana has benefited 52.2 million (5.22 crore) families with a life insurance cover of Rs 200,000 (Rs 2 lakh) on payment of a premium of only Rs 330 per annum. Likewise, under Pradhan Mantri Suraksha Bima Yojana, 132.5 million (13.25 crore) persons have been insured with personal accident cover of Rs 200,000 (Rs 2 lakh) on payment of a premium of only Rs 12 per annum.
The government has also tried to control the cost of medicines and implants. Capping of prices of medicines and medical devices, including stents and knee implants, by the government has helped patients save a total of Rs 113.65 billion (Rs 11,365.61 crore) till December 2017, the Parliament was informed in December last year. Ceiling prices of 851 formulations (including two coronary stents) under Revised Schedule-I based on National List of Essential Medicines (NLEM), 2015, were fixed till December 2017, Minister of State for Chemicals & Fertilisers Mansukh L Mandaviya said in a written reply to the Rajya Sabha.