The coverage is for an amount of Rs 500,000 per family for secondary and tertiary care. Covered families have no co-payment obligations and the Centre and states take the responsibility of the premium at a 60:40 ratio. The premium is to be arrived at by competition. Regardless of insurance or the trust structure (essentially a healthcare financing agency) that will be followed, the outcomes are fairly known because of prior experience with the Rashtriya Swasthya Bima Yojana and other schemes run by states. The supply side problems will continue, such as expenditure, which has been indicated to be Rs 2,000 crore, but is likely to go up to Rs 10,000 crore and perhaps even beyond that.
Evidence shows that health outcomes are much better where reliable primary medical care is provided. But unfortunately, primary healthcare in the public sector is fraught with problems such as uneven distribution across states, vacancies and the problem of retention and lack of regular presence of medical professionals. Primary medical care is neglected as a subset within primary healthcare, while a whole host of services are provided at primary healthcare centres. Not the least of its problems is chronic under-funding. Adequate funding for primary medical care is the best bet for providing timely medical attention, prevention of disease and managing chronic diseases. Such investments in Brazil, China and Sri Lanka have shown reduced disease burden, longer life expectancy and reduction of hospitalisation and emergencies.
Primary medical care by providers including PHCs is beneficial for the poor because of the patient-centred approach and likelihood of first contact and continued care. Good primary care has been able to reduce the adverse correlation between income inequality and general health. Shifting to secondary and tertiary medical care by the NHPS for specialist services is not effective, efficient or equitable. Under tertiary and secondary care, out-of-pocket expenses for the poor are said to be higher by one-third, according to studies. There are also differences in provision on care depending on region. The effect of public health insurance on out-of-pocket expenditure for emergency medical care depends strongly on the strength and quality of primary care facilities, which appears to be missing in the present calculus of the NHPS.
The introduction of insurance for secondary and tertiary care without looking at primary care may not protect the poor from impoverishment because of high out-of-pocket expenses, in mostly private sector facilities. The poor also find it difficult to negotiate specialist care hospitals with asymmetrical information. Often, service providers in health knows more than the patient, who probably know only the symptoms or doesn’t know anything at all and gets drawn to free camps. In the absence of regulatory oversight, specialist hospitals maximise their return by pushing up the expenditure unnecessarily. The hospitals also create provider-induced demand by conducting medical camps to match patients and go for premature invasive procedures, converging on the cap figure of Rs 5 lakh.
Other workable optimal solutions are available which tend not to be looked at once the insurance option is explored. One of them is a family health protection plan (prepared by Dr Prasanta Mahapatra and others) to cover ambulatory medical care and hospital access comprehensively at the primary level, which covers everyone with a graded subsidy and tax rebate. Every family gets covered up to Rs 50,000, and all providers of primary medical care such as PHCs, profitable and not-for-profit private providers, general practitioners, nursing homes participate and compete after satisfying the required quality of service standards. This scheme was available with the Ministry of Health and Family Welfare. Universalising an insurance plan not only mitigates the adverse selection problem, it also functions better by incorporating elites within its fold.
It is evident that catastrophic insurance edges out long-term investment by the state and the people. Because of this, it is electorally profitable and politically attractive. But the problem with insurance is you don’t look at other options. While it may absolve politicians from the guilt of not doing much, it divests efforts towards covering systemic risk by glossing over weaknesses of primary medical care, with long-term consequences.
Satya N. Mohanty
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