India should not follow the China model in universal health-insurance plans: Economist

Maitri Porecha

India should not go the China way while implementing Ayushman Bharat, warned Winnie Yip, Professor at the Harvard TH Chan School of Public Health.

Yip was addressing the who’s who of Indian healthcare industry at the Confederation of Indian Industries (CII) health summit, in New Delhi, on Thursday.

While China has achieved universal health-insurance coverage after a fresh set of reforms, initiated primarily for the poor in 2005, it has done little to reduce the out-of-pocket expenditure (OOP) of patients, Yip pointed out.

“Up to 50 per cent of all hospital expenses were being reimbursed, yet the OOP was not reducing. The reason was that health expenditure was growing even faster,” she said.

In China, according to initial results in 2011-12, insurance coverage had reached 95 per cent, reimbursements gradually increased, and hospitalisation rates grew from 6 per cent in 2008 to 16 per cent in 2017. “Does insurance actually get people more sick?,” quipped Yip.

In 2015, according to World Bank figures, 32.4 per cent of Chinese population incurred OOP, while 65.1 per cent of Indians spent out of their own pockets for healthcare.

Another criticism that Yip drew was that Ayushman Bharat only covers hospital care, as the system of primary healthcare structures – known as health and wellness centres – is not integrated with the scheme. “Any system that covers only hospital care is expensive and difficult to sustain financially, and not suitable for the future health needs of the population,” stated Yip.

Misalignment of incentives

While doctors and staff in hospitals get paid fairly well, incentives for preventive healthcare workers are usually very low. Yip said that the misalignment of incentives is a barrier to build integrated systems.

Another challenge in India is to generate enough capital to invest in healthcare. In China, the usage of electronic fund transfer has been utilised creatively to implement a scheme, which literally translates to “a drop of water”. Using the messaging app Vchat, the Chinese government was able to seek contributions for the scheme. “Each person contributed a very small sum, with an assurance that if they were ill they would get a substantial coverage. A large number of people participated,” said Yip.

Going further, the CEO of Ayushman Bharat, Indu Bhushan, agreed with Yip’s view point on the differential pricing system of services in public and private sectors as well as across geographies. “We are in constant discussions to consider revised pricing of our package rates. However, we do not want to be revising prices every few months, and do not want to replace unscientific methodology with other. Industry inputs on price revisions will definitely help us,” said Bhushan.