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Needed, a regulator for the health sector: Economic Survey

TV Jayan New Delhi | Updated on January 29, 2021

Covid pandemic has taught valuable lessons, says Survey

The government should seriously consider regulating the health sector, which is dominated by private players , very similar to the way investment and banking and financial sectors are regulated.

The Survey, which closely examined information asymmetry in the health sector — inability of patients to know the value of healthcare service received — said patients currently rely on the reputation of the hospital or the doctor, which at best can only be a proxy for quality.

Mitigating information asymmetry can help reduce insurance premiums, offer better products as well as improve insurance penetration.

 

Highest OOPE

The Survey called for increasing the public healthcare spending from 1 per cent of GDP to 2.5-3 per cent so that out-of-pocket expenditure (OOPE) reduces from the current 65 per cent to 35 per cent.

Observing that India has one of the highest OOPE in the world, it said life expectancy positively correlates with per capita public health expenditure.

A key learning that emerged from the pandemic was that a healthcare crisis can be transformed into an economic and social crisis, the Survey said.

Focus on NHM

The Survey observed that the National Health Mission (NHM) is critical for mitigating inequality in healthcare access, citing the example of increased number of the poorest people coming forward for pre-natal, post-natal and institutional delivery.

Comparing the States that embraced Ayushman Bharat with those that did not, the Survey saidthe proportion of households with health insurance increased 54 per cent in the States that implemented PM-JAY (PM Jan Arogya Yojana) while falling by 10 per cent in those that did not.

Published on January 29, 2021

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