From UPSC perspective, the following things are important :
Prelims level : Not much
Mains level : Paper 2- Extending coverage to OP care
Over the past two decades, initiatives announced to extend health care coverage to the indigent sections have come under criticism due to their near-exclusive focus on hospitalisation (inpatient, IP) care.
Significance of outpatient health care
- What is outpatient health care: Outpatient (OP) health care, mainly comprising doctor consultations, drugs, and tests, can be called ‘the elephant in the room’ of Indian public health care policy.
- OP expenses have the majority share in total out-of-pocket (OOP) expenditure on health.
Why do we need to extend OP care coverage?
- How IP care differs from OP care? IP care comprises high-impact and unavoidable episodes that are less prone to misuse than OP care, for which demand is considerably more sensitive to price and is thus more prone to overuse under health insurance.
- IP insurance prioritised: This logic, among other reasons, has led to IP insurance schemes being prioritised.
-  OP care and preventive care is neglected: While a price-sensitive demand for OP care entails that it could be misused under insurance, it also means that OP care is the first to come under the knife when there is no insurance.
- In India, where there are many public IP insurance schemes but no OP coverage, this incentive is further amplified.
- The mantra of ‘prevention is better than cure’ thus goes for a toss.
-  Against economic sense: It defies economic sense to prioritise IP care over OP care for public funds.
- Preventive and primary care services which often come with externalities, elicit little felt need and demand, and must therefore be the primary recipients of public investment.
- Not conducive to epidemiological profile: Greater investments in IP care today translate to even greater IP care investments in future, further reduction in primary care spending, and ultimately lesser ‘health’ for the money invested.
- None of these are conducive to the epidemiological profile that characterises this country.
Issues with using private commercial insurance to extend OP care coverage nationwide
- Some recent policy pronouncements by the Centre have conveyed an inclination to expand healthcare coverage with little fiscal implications for the government.
-  The OP practices are under-regulated and there is a lack of standards.
-  The difficulty to monitor OP clinical and prescribing behaviours and the concomitant higher likelihood of malpractices.
-  Low public awareness of insurance products and a low ability to discern entitlements and exclusions.
-  Add to it the inexperience that a still under-developed private OP insurance sector brings.
- All these entail tremendous and largely wasteful costs and administrative complexity, and it would be of little help even if the government was to step in with considerable subsidies.
- Need for fiscal and time commitment: Significant improvements in healthcare are implausible without significant fiscal and time commitments.
- No perfect model: There is no ‘perfect’ model of expanding healthcare — the emphasis must be on finding the best fit.
- Implementing even such a best fit could involve adopting certain modalities with known drawbacks.
- Expand public spending: The focus must be on expanding public OP care facilities and services financed mainly by tax revenues.
- For India, wisdom immediately points to successful countries that are (or were, at one point) much closer to its socioeconomic fabric, such as Thailand, than countries like the U.S. which we currently look to emulate.
- Now, the sparse number and distribution of public facilities offers various modes of rationing care, and their expansion is likely to result in a considerable spike in demand.
- Contracting with private players: Contracting with private players based on objective and transparent criteria would also be called for, with just enough centralised supervision to deter corruption while preserving local autonomy.
- To deter supply-side malpractices, low-powered modes of provider payment, such as capitation, may be considered for private providers wherever possible.
There are several compelling reasons for extending outpatient health care coverage even though there are several challenges to overcome to achieve this.