Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.

Healthcare: Public Health and The Insurance Funding


From UPSC perspective, the following things are important :

Prelims level: Various Insurance Schemes

Mains level: Insurance based healthcare funding, benefits and drawbacks

Central Idea

  • The Tamil Nadu public health model has achieved success in improving healthcare outcomes and maintaining equity in healthcare delivery. However, the shift in healthcare funding to insurance companies has brought both benefits and drawbacks to the public healthcare system.

The key features of the Tamil Nadu public health model

  • Primary Healthcare: The Tamil Nadu public health model is based on a strong emphasis on primary healthcare, which is the first point of contact for patients seeking medical attention. Primary healthcare centres provide basic healthcare services and preventive care, which are critical to reducing the burden of disease.
  • Public Health Infrastructure: The state has a well-established public health infrastructure, including a network of primary healthcare centres, secondary and tertiary care hospitals, and medical colleges. The state government has also invested in health infrastructure, including sanitation facilities, water supply, and waste management.
  • Health Insurance: The Tamil Nadu government has implemented a comprehensive health insurance scheme, the Chief Minister’s Comprehensive Health Insurance Scheme (CMCHIS), which provides free healthcare services to families living below the poverty line and low-income groups.
  • Human Resource Development: The state government has also focused on developing human resources in healthcare. It has set up a large number of nursing and paramedical institutions to train healthcare professionals.
  • Health Awareness: The Tamil Nadu government has launched various health awareness campaigns to educate people about health issues, including communicable and non-communicable diseases. The government has also launched campaigns to promote healthy lifestyle choices, such as a balanced diet and regular exercise.
  • Partnership with NGOs: The government has partnered with non-governmental organizations (NGOs) to implement various health programs. These partnerships have helped in the effective delivery of healthcare services in remote and rural areas of the state.
  • Innovations: Tamil Nadu has implemented several innovative approaches in healthcare, such as telemedicine, which enables patients to receive medical consultation and treatment remotely using technology. The state has also established mobile clinics to provide healthcare services to people living in remote areas.

Benefits of Decentralization

  • Improved access to healthcare: Decentralization can help to improve access to healthcare services, particularly in rural or remote areas. By empowering local communities and healthcare providers to make decisions about healthcare delivery, services can be tailored to meet the specific needs of the population.
  • Better quality of care: Decentralization can lead to better quality of care by enabling healthcare providers to respond more quickly and effectively to the needs of their patients. It can also promote innovation and experimentation in healthcare delivery, leading to new and improved approaches to patient care.
  • Increased accountability: Decentralization can increase accountability in healthcare delivery by empowering local communities and healthcare providers to monitor and evaluate the quality of care. This can help to identify and address problems in healthcare delivery, leading to improved outcomes for patients.
  • Cost savings: Decentralization can lead to cost savings in healthcare delivery by reducing the administrative costs associated with centralized decision-making and management. It can also promote greater efficiency in healthcare delivery, leading to reduced waste and duplication of services.

Insurance Funding in healthcare

  • Insurance funding in healthcare refers to the use of insurance mechanisms to finance healthcare services. This involves pooling financial resources from individuals or groups through insurance schemes, which are then used to pay for healthcare services.
  • Insurance funding can help to mitigate the financial risks associated with healthcare, and ensure that individuals have access to the care they need without incurring excessive costs.

Drawbacks of Insurance Funding

  • Shifted focus: The focus on indemnity and negotiations with insurance companies has shifted the focus of hospitals from patient care to claiming money.
  • Compromised quality of service: The appointment of contractual employees with meager pay has created a divide between permanent high-paid staff and temporary low-salaried staff, leading to a compromise in the quality of service.

Facts for prelims

Type of Insurance Funding Description
Private health insurance Purchased by individuals or employers to cover healthcare costs. Coverage, cost, and benefits vary widely and may be offered by commercial insurers, nonprofit organizations, or government programs
Public health insurance Provided by government-run programs, typically funded through taxes or other government revenues. Coverage is provided to eligible individuals based on criteria such as age, income, or medical need. Pradhan Mantri Jan Arogya Yojana (PMJAY) is a government-funded health insurance program that provides free health coverage to economically disadvantaged families across India.
Social health insurance A hybrid model that combines elements of private and public insurance. Individuals and employers contribute to a national insurance fund that is used to pay for healthcare services, typically managed by a government agency but delivered by private providers
Employer-sponsored insurance Private insurance provided by employers to their employees, often mandatory in many countries. Employers are required to provide a certain level of coverage to their employees.


  • While insurance funding has brought benefits, it has also created challenges, including the erosion of compassion among health professionals and a diversion of funds from public to private hospitals. It is necessary to strike a balance between decentralization, insurance funding, and preserving the fundamental principles of equity, compassion, and excellence in care to maintain the success of Tamil Nadu’s public healthcare system.

Mains Question

Q. Highlight the benefits of decentralization in healthcare delivery. Analyse the benefits and drawbacks of insurance funding in India?

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