India Economy

Medicare: A more potent package

PT Jyothi Datta Mumbai | Updated on February 01, 2018

Healthcare takes centrestage The move towards universal healthcare will help bridge the rural-urban divide   -  The Hindu

Will this new version of the 2016 social security scheme prove more effective?

The ambitious plan to roll out health coverage for 10 crore families will make it the world’s largest government funded healthcare programme, Finance Minister Arun Jaitley, said today.

High on optics as it puts health on the centre-stage, this announcement has already been labelled “Modicare” (a la Obamacare) on social media, with an eye clearly on election 2019.

Unfortunately though, this proposal has a precedent — a social security proposal announced in Budget 2016 did not take off for want of a roll-out plan and supporting fund allocation.

Jaitley’s flagship National Health Protection Scheme (Budget 2018) speaks of providing healthcare coverage to about 50 crore beneficiaries, providing them coverage of up to ₹5 lakh per family per year for secondary and tertiary care hospitalisation.

“Adequate funds will be provided for smooth implementation of this programme,” he had said.

But this is merely an expanded, repackaged version of the social security scheme of 2016, and even a rough calculation shows that it doesn’t add up, says Indranil Mukhopadhyay, a health economist and Assistant Professor, OP Jindal Univeristy.

“If we look at similar models and at half the market rates, the allocation the Government would need to pay for just the premiums is about ₹1.2 lakh crore and the country’s total spending on health is about ₹1.3 lakh crore,” he said.

There is no clarity on how this will be rolled out and who will foot the bill, a plan that mirrors the confusion of the 2016 proposal.

Even if it were to be rolled out through the RSBY (Rashtriya Swasthya Bima Yojna), the allocation for the scheme this year is ₹2,000 crore, he added.

And while Jaitley says the national healthcare protection scheme is a step towards Universal Health Coverage, Mukhopadhyay points out that past announcements on the UHC roll out barely saw any follow-up action.

Gaps not addressed

While health is getting a mention in the Budget in terms of the 3,000 Jan Aushadi centres that sell less expensive medicines or the Government’s initiatives to bring down the price of cardiac stents, there is little in it to address several other gaps affecting public health.

Shailaja Chandra, former secretary at the Health Ministry, is happy about the importance that healthcare is getting in the Budget in terms of an expanded health insurance or financial support of ₹500 per month toward the nutrition of a person undergoing treatment for tuberculosis.

However, she adds, many of the initiatives don’t seem to be thought through.

For instance, the gaps in public health delivery in terms of staffing or the regulatory coverage of the healthcare prevention scheme.

There needs to be greater focus on a preventive set-up or a strengthening of the existing framework to tackle communicable diseases and prevent more tragedies like the one at Gorakhpur from happening, she says, referring to the death of several infants at a Government hospital in Uttar Pradesh.

Insurance companies could end up reaping the benefits of the health coverage scheme, she says, calling for a regulatory mechanism to make sure they pay patient bills without delay.

With the Budget being high on making promises, the critical element now is how the Centre rolls out these initiatives, some of which have already stumbled in the past over inadequate funds.

Our Chennai Bureau reports: The move towards the universal healthcare, comprehensive healthcare centres and new medical colleges will help bridge the rural-urban divide, say healthcare players.

Prathap C Reddy, Chairman, Apollo Hospitals, said in a statement that the initiative to cover 10 crore families with ₹5 lakh per family/per year with insurance cover for secondary and tertiary healthcare, will be a game changer.

Suneeta Reddy, Managing Director, Apollo Hospitals, said the initiative that amounts to $800 billion is even higher than the US’ Medicaid programme at $550 billion.


R Sabesan, Chief Financial Officer, Dr Agarwals Group of Eye Hospitals, said that the tax relief on entities with turnover of up to ₹250 crore will also have a positive impact on the sector.

“It will allow mid-sized healthcare players to invest and thereby improve the quality of healthcare in the country,” he added.

Published on February 01, 2018

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