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

Modicare will find it tough to get out of the blocks

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Mains Paper 2: Governance | Issues relating to development & management of Social Sector/Services relating to Health, Education, Human Resources.

From UPSC perspective, the following things are important:

Prelims level: National Health Protection Scheme, RSBY

Mains level: Lacunae in public health infrastructure in India


World’s largest public healthcare scheme

  1. It was announced in Budget 2018
  2. National Health Protection Scheme aims to provide medical insurance cover of 5 lakhs Rs. per annum to each family covered under the scheme

India’s perennial healthcare failure

  1. According to World Bank data, 62.4% of total health expenditure in the country was out of pocket (OOP) as of 2014
  2. This was very high compared to a global average of a little over 18%
  3. This adds around seven percentage points to India’s poverty figures

International experiments similar to Modicare

  1. European states have implemented government or government mandated insurance first in the 1920s
  2. A number of southern European countries followed suit in the 1960s
  3. They achieved coverage and outcomes that are among the best in the world
  4. Germany’s system relies on high formal sector employment to partly fund government insurance managed by independent trusts
  5. In Switzerland, the most free-market model in the world is being used, with the government subsidizing private insurance on a sliding scale
  6. China has used publicly funded health insurance to achieve wide coverage

Results from these experiments

  1. In the absence of the European states’ governance capabilities outcomes have been poor and OOP expenditure has not decreased

RSBY in India

  1. Rashtriya Swasthya Bima Yojana was implemented in 2008
  2. It aimed to cover Below Poverty Line (BPL) households, funding private insurance for inpatient coverage of Rs30,000 for five members per household
  3. The scheme had failed in both its primary objectives
  4. It covered only 12.7% of households among the poorest quintile at the national level
  5. It failed to significantly impact OOP expenditure or reduce health-related poverty

Why this failure?

  1. At both the central and state levels, governments have lacked the capacity to regulate RSBY effectively
  2. Effective targeting has not been a priority
  3. Doctors and hospitals have fallen into the supplier-induced demand trap, recommending unnecessary procedures in order to claim reimbursements

Way forward

  1. Healthcare lies at a confluence of inelastic demand, political sensitivity, economic consequences and ethical governance
  2. This makes the state’s role crucial
  3. Government insurance works to improve healthcare access and outcomes if the state has the agility, expertise and regulatory capacity to implement it effectively which is currently lacking in India

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