From ideas to action

The National Health Protection Scheme (NHPS), which promises to provide a cover of ₹5 lakh each to 10 crore households (50 crore people, or about 40 per cent of the population), marks a big step forward to make secondary and tertiary healthcare affordable to the poor. The initiative is likely to reduce “catastrophic” out-of-pocket expenses, which are estimated to drive a staggering 63 million (a Health Ministry estimate) into poverty each year. The budget doesn't spell out the required outlay, but a NITI Aayog member has pointed out that the premium would work out to ₹1,200 per family, or a sum of ₹12,000 crore. Raising this amount is not a tall order; according to the budget speech, the new 4 per cent health and education cess (as against the 3 per cent education cess) is expected to raise an additional ₹11,000 crore. Experts have pointed out that with the Centre and States already spending ₹3,000 crore under the Rashtriya Swasthya Bima Yojana (RSBY), which provides a family cover of ₹ 30,000 to a population of over 33 crore, an additional ₹9,000 crore would be needed. The NHPS will have to cover about 16 crore people so far out of the RSBY net. Besides, the Southern States have their own health insurance schemes, which have been effective. In keeping with the spirit of ‘cooperative federalism’, the Centre should leave these schemes intact, and improve coverage in the northern States where health systems and outcomes are absymal. For instance, barely half the BPL population has been covered by RSBY in Assam and Bihar, whereas it is just 40 per cent in Uttarakhand. The NHPS should learn from the shortcomings of the RSBY, begun in 2008.

Despite RSBY, NSSO data points out that out-of-pocket (OOP) expenses have been on the rise in recent years among the poorer sections. This is because 65 per cent of OOP expenses are on account of outpatient treatment, which is outside the scope of RSBY. Regulation, through the proposed National Medical Commission, should seek to ensure that insurance does not lead to overcharging and medical malpractices — rendering the cover ineffective.

The experience of the southern States tells us that insurance works best when public health infrastructure is well developed. RSBY seems to have been less effective where most of the hospitals empanelled are private ones, as in Bihar. Health insurance can supplement, and not substitute, efforts to improve public health infrastructure — the present level of 1.2 per cent of government spending on GDP needs to be doubled.

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