[op-ed snap] Hardly a gamechanger

Image Source


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

From UPSC perspective, the following things are important:

Prelims level: Particulars of the scheme(read our previous newscards on the NHPS)

Mains level: The NHPS is a very ambitious scheme, recently announced in the Budget. The newscard cites some issues related to the scheme. Complement this newscard with our previous newscards on the NHPS.


National Health Protection Scheme(NHPS)

  1. The National Health Protection Scheme announced in this year’s Budget has generated a lot of debate
  2. As only Rs. 2,000 crore in 2018-19 has been allotted to finance this scheme, various government functionaries have come up with estimates between Rs. 10,000 to Rs. 12,000 crore as its actual cost

Debate on crucial issues
FIRST: Financial issues

  1. The government’s target group seems to be the bottom 40% (50 crore) of the population
  2. A good starting point would be to look at the insurance coverage that this section already has
  3. The NSS  data shows that only 11.3% of the bottom 40%  population has any insurance coverage as against 17.9% for the top 60%
  4. In other words, just to bring the entire 40% of the population under health insurance is a huge task, with fiscal implications
  5. The NSS data shows, the total cost of medical expenditure (including reimbursements) for hospitalisations incurred by the bottom 40% was Rs. 14,286.82 crore in 2014
  6. Therefore, with Rs. 5 lakh coverage, the premium which needs to be paid would be much higher than the government’s estimate
  7. There has not been much allocation for it in the Budget

SECOND: Low reimbursement in government schemes

  1. Reimbursement as a percentage of medical cost of hospitalisation in government schemes is very low, especially for the bottom 40% of the population
  2. Only 4.5% of total hospitalisation expenses are reimbursed to the bottom 40% and 11.9% for the entire population
  3. This raises questions about the efficacy of government schemes
  4. Even with the meagre coverage of Rs. 30,000 (RSBY), the proportion of hospitalisation cost reimbursed is low
  5. There is no guarantee that increasing coverage will improve this

THIRD: Unwillingness to pay reimbursement

  1. The proportion of hospitalisation cost reimbursed is much higher for insurance schemes directly bought by households than government ones
  2. In the case of insurance being paid by the government, insurance companies are most often unwilling to pay the reimbursement as compared to when a household pays
  3. Why: This could be a result of low premiums paid by the government

Other important issues

  1. A significant proportion (more than 50%) of the population opt for private facilities
  2. Thus, health insurance creates a larger market for private players
  3. A sudden expansion of the government-funded insurance market may aggravate the problem of hospital-induced demand for medical care such as an unnecessary hospital stay, diagnostic tests and surgeries

The way forward

  1. If the government is serious about providing health care to even the bottom 40% of the population, it should increase its current budgetary allocation
  2. Also, government should strengthen the health infrastructure at all levels which includes a strong regulatory mechanism
Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.
  • Subscribe

    Do not miss important study material

Leave a Reply

Please Login to comment
Notify of