Myths
of Modicare
Perhaps for the first time in India healthcare
has taken the centre stage of debate and discussion. The country where people
still trust quacks and ascetic healers, the Union finance minister through his
budget speech has proposed an ambitious health protection scheme. Packaged as
Modicare the proposals might divert public attention from the government’s
primary responsibility to provide equitable and affordable healthcare to all
its citizens.
Health is perhaps
the main takeaway for 1.3 billion Indians from the General Budget of 2018-19
which is the last full budget of the present government at the centre. Arun Jaitley,
the Union minister for finance and corporate affairs, while presenting the
Budget in the Parliament on 1 February, 2018 announced two major initiatives in
health sector, as part of Ayushman Bharat Programme – (i) Health and Wellness
Centre which “will bring health care system closer to homes of people” and (ii)
National Health Protection Scheme (NHPS) which “will cover 10 crore poor and
vulnerable families (approximately 50 crore beneficiaries) providing coverage
upto 5 lakh rupees per family per year for secondary and tertiary care
hospitalization”. [PIB 2018]
While declaring
NHPS, touted Modicare by some, as the “world’s largest government funded health
care programme”, the finance minister further said that these two health sector
initiatives “will build a New India 2022 and ensure enhanced productivity, well
being and avert wage loss and impoverishment” and “will also generate lakhs of
jobs, particularly for women”. [PIB 2018]
Considering
India’s overall socio-economic scenario, particularly that of the health
sector, such holistic approach of the government deserves a loud applause.
However, applause should also be assessed appositely. Unlike yesteryears, when
the Budget speeches had a very little mention on health and, perhaps, never
kindled much discussion; health has suddenly been identified this year as very
important issue by almost every commentary. It is indeed necessary to view finance
minister’s Budget speech on health from multiple angles. This article is
destined to do so.
Discordant Vertex:
A press
conference chaired by the health minister J P Nadda, called after a day, saw no
answers to many questions, pertinent to the above announcements. [Bhuyan 2018] Nadda
told reporters, “We will give the details but not today. We are working on the
nitty-gritties. We have to work that out with all other departments as well.”
[India TV News 2018] Health minister’s explanation raised doubts about the
government’s preparedness before making announcements. He, however, announced
that Rs 2,000 crore had been allocated for the NHPS and the cost bearing ratio
for the centre and the state would be 60:40 while implementing. [Gandhi and
Kaul 2018]
Another press
conference on the same day, which was being held by NITI Aayog on the same
issue, had somehow laid some details of the new insurance scheme. Alok Kumar,
adviser on health, NITI Aayog, told that NHPS would expectedly reach to 50 per
cent beneficiaries in the first year based on the states’ acceptance and NITI
Aayog would need a budget of Rs 6,000 crore in 2018-19 for that. Again, to
cover 10 crore families it would require around Rs 12,000 crore every year. Further,
a premium between Rs 1,000 and Rs 1,200 for each family (having no cap on the
family size) will provide a floating cover of Rs 5 lakh to the beneficiaries of
the scheme, those were identified on the basis of the socio-economic census
2011. The scheme is likely to be rolled out either on Independence Day or on
Gandhi Jayanti, this year. [Gandhi and Kaul 2018]
Further, the finance
secretary Hasmukh Adhia told that the government expects the mega healthcare
scheme announced in the Budget to cost only about Rs 10,000 crore annually and
is expected to be rolled out in six to eight months. A senior government
official, on assurance of anonymity, told that it would have to be seen whether
the government would be in a position to implement the scheme across the
country before the 2019 elections. [Mishra 2018]
Amidst such varying
communications at the highest level, some enthusiastic storey-teller brought
out “the story behind Modicare” which mentions that the plan was initiated by
the Prime Minister in January, 2016 and it is not a “knee-jerk poll sop”.
[Yadav 2018] Though, several experts in well informed circle have criticized the
scheme as considerable disappointment.
India’s Miserable
Health Story:
India ranks 143
out of 184 countries for health-related Sustainable Development Goals. At 17%
of the world’s population, India contributes disproportionally to the global
burden of disease. A quarter of the world’s tuberculosis patients live in
India. The country leads with population having unhealthy lifestyles, premature
cardiovascular disease, and an epidemic of diabetes. [Lancet, 2017] India’s
poor healthcare network further adds up to the miseries. Government expenditure
on health in India is one of the lowest in the world at 1·4% of gross domestic
product, an amount wholly inadequate to run health facilities. [Lancet, 2017]
Poor public funding causes common Indians high burden of
out-of-pocket-expenditure (OoPE) on health. Two-thirds of healthcare spending
in India is out of pocket, or done by the common man, according to a study by
the Institute for Health Metrics and Evaluation, University of
Washington. [Mascarenhas 2017] This pushes 7% of the country’s population
into poverty every year. [Shah 2018]
According to a
study by the premier AIIMS which was published in the National Medical Journal
of India, illness not only affects a patient’s health but also financially
paralyses an entire family, be it poor or middle class. The study found that, 63.5%
of rural and 44.9% of urban families had to decrease their food expenditure after
treating someone in the family. High OoPE can also make the economic recovery
challenging for a family which has been described as ‘medical poverty trap’.
[PTI 2017]
India’s ugly
health story needs urgent correction. The desire to see India as the fastest
growing economy cannot be achieved without its people being in sound mental and
physical state. This sets the health care as one of the most priority agenda
for the government. The above background provokes us to cross-examine the
finance minister’s health related Budget proposals.
Health and
Wellness Centre:
The Budget has
allocated Rs 1,200 crore to convert 1.5 lakh sub-centres into health and
wellness centres (Rs 80,000 per sub-centre) which, according to the finance minister,
will provide comprehensive
health care including free essential drugs and diagnostic services. The
sub-centres are deficient with infrastructure, equipments, medicines and man
power. The budgetary allocation is inadequate to support the government’s
ambitious plan.
Rural healthcare system in India runs through
sub-centres (SCs), Primary Health Centres (PHCs) and Community Health Centres
(CHCs). [Chart-1] As per the rural health statistics published by the
ministry of health and family welfare, government of India, as on 31 March,
2017, there are 1,56,231 SCs; 25,650 PHCs and 5,624 CHCs functioning in India.
Chart-1: Rural Health Care System in India
•
Community
Health Centre (CHC)
A 30 bedded Hospital/Referral Unit for 4 PHCs with
Specialized services
•
Primary Health Centre (PHC)
A Referral Unit for 6 Sub Centres 4-6 bedded manned with a
Medical Officer Incharge and 14 subordinate paramedical staff
•
Sub Centre
(SC)
Most peripheral contact point between Primary Health
Care System & Community manned with one HW(F)/ANM & one HW(M)
Source: Ministry
of health and family welfare, Government of India
As on 31 March,
2017, only 17,204 (11%) SCs and 3,303 (13%) PHCs were functioning as per Indian
Public Health Standard (IPHS) norms. 20.5% SCs run without regular water
supply, 23.9% are without electric supply and about 10% do not have all-weather
motorable approach roads. Out of 25650 PHCs, only 39.2% function on 24×7 basis.
27% SCs run without separate male and female toilet. [Health statistics, 2017]
The availability
of manpower is one of the important pre-requisite for the efficient functioning
of the Rural Health services. The overall shortfall in the posts of HW(F)/ANM
was 5.6% and 63.7% in case of HW (M). Even out of the sanctioned posts, a
significant percentage of posts were vacant at all the levels. For instance,
13.2% of the sanctioned posts of HW (Female)/ANM and 37.5% of the sanctioned
posts of Male Health Worker were vacant at SCs. Out of all SCs 6,405 were functioning
without a Female Health Worker/ANM; 78,584 without a Male Health Worker and
4,218 without either. [Health statistics]
First of all,
these 1.5 lakh SCs need their infrastructural deficiencies rectified and
required human resources recruited. Then only they can become health and
wellness centre. Hence, it is difficult to understand as to how such gigantic
task will be completed with a paltry funding.
National Health
Protection Scheme (NHPS):
The Union
finance minister’s tall claim in the Parliament to take healthcare protection
to a new “aspirational level” through NHPS is certainly misleading.
Firstly, such
government funded health insurance is not new in India. A similar scheme, the
Rashtriya Swasthya Bima Yojana (RSBY) was launched in 2008 which provides with
an annual coverage of Rs 30,000 to the families living below poverty line. The
RSBY has an enrolment of 3.6 crore families and its premium is subsidized and
shared by the central (75%) and the state (25%) governments. Thus, the RSBY is
basically a public funded, targeted health insurance scheme providing cashless
inpatient service in private or public hospitals. The RSBY has been hailed by
the United Nations and International Labour Organisation, beside other
international bodies. [Khan, 2018]
Secondly, the
same finance minister introduced a
national health protection scheme (NHPS) last year which was actually a
revamped RSBY with expanded health coverage of up to Rs I lakh per family per
year. Rs 1,500 crore was allocated for NHPS in 2016-17 for health insurance of
one-third of the population. [Sinha 2018] Ironically, the scheme never took
off and the government spent only Rs 500
crore. A health ministry official, however, said the reason for dumping the
previous insurance scheme might be it was “not inspirational enough”. [Bhuyan,
2018]
Thirdly, NHPS
would disrupt and derail the states’ own insurance schemes. Twenty-four states
already have health protection schemes in some form or the other which are
likely to be subsumed in the NHPS. [Gandhi and Kaul 2018] Several states have
much wider and more inclusive health insurance schemes than that of the NHPS. Some
of the states’ schemes provide with coverage ranging between Rs 2 lakh to Rs 5
lakh per family. [Indian Express 2018] The variance in eligibility criteria
between the NHPS and state’s scheme may raise issues once the former subsumes the
later. For example, Kerala identifies people on the BPL list but the Centre
will be relying upon the Socio Economic Caste Census (SECC). What will happen
to the existing beneficiaries if they are not covered under the Centre’s
criteria? [Jayashree 2018]
Fourthly, implementation
of Aadhar-based authentication to access the NHPS is more disappointing. Dr.
Vinod Kumar Paul, member (health and nutrition), NITI Aayog told that Modicare
would be a cashless, Aadhaar-enabled scheme. [Sharma 2018] There will be
provisions for Aadhar-based smart cards containing health details of senior
citizens. Any failure of such Aadhar-based authentication, especially for the
elderly, would cause difficulties in accessing healthcare. This is detrimental
and exclusionary in nature. Much has been written about it. Very recently, a
25-year old woman delivered her baby outside the emergency ward of a civil
hospital at Gurugram since the staff allegedly denied her admission into the
labour ward for not carrying Aadhar card. [PTI-NDTV 2018]
Finally,
the lack of seriousness for a “Swastha Bharat” is evident through a low level
of public spending on health. This year the Centre’s budget for health has marginally
increased by 12% from Rs 50,281 crore in 2017-18 to Rs 56,226 crore in 2018-19.
If we compare the 2018-19 allocation with
the revised estimate for 2017-18 which was Rs 54,852 crore, then the increase
is a mere 2.4%. In real terms, this is a decline if we include the inflation
over 5%. [Duggal 2018] For National
Health Mission (NHM), there is a decline in allocation from Rs 30,801 crore in
2017-18 to Rs 30,129.61 crore in 2018-19. Budgetary allocation for the
Reproductive Child Health has declined by 30% (from Rs 7,545 crore in 2017-18
to Rs 5,253 crore in 2018-19). For communicable disease flexipool the allocation
has declined by 27% (from Rs 2,648 crore to Rs 1,928 crore during the period
under review). [Duggal 2018]
Thus, the health
budget for 2018-19 is a clear prescription whether it is Modi-care or
Modi-damn-care.
A Boon for
Private Capital:
A decade old
experience of promoting insurance-based schemes, such as the RSBY and its
state-clones, suggests that such practice has neither significantly reduced
OoPE nor it has increased access to healthcare for the poor. [Sinha 2018]
However, the proposal for increased insurance coverage under the NHPS upto Rs 5
lakh is a boon for the private insurers since the premium amount will also jump
on higher side forcing a ‘legitimate leak’ of public money into the private
hand. There is already a government push for running NHPS through private
insurers. Perhaps, this needs further explanations.
During 2015-16,
the health insurance segment has achieved a growth rate of 21.7% percent in
gross premium, which is the highest for the past five years. However, there is
a drop in the share of private general insurers, whose market share has come
down from 22% in 2014-15 to 20% in 2015-16. It can be observed that over the
past five years, the share of private sector general insurers has declined from
27 percent in 2011-12 to 20 percent in 2015-16. [Table-1]
Table-1: Trend
in Health Insurance Premium over the Past Five Years
Sectors
|
2011-12
|
2012-13
|
2013-14
|
2014-15
|
2015-16
|
|
Public Sector General
Insurer
|
Rs in crore
|
8015
|
9580
|
10841
|
12882
|
15591
|
Market Share %
|
61
|
62
|
62
|
64
|
64
|
|
Private Sector General
Insurer
|
Rs in crore
|
3445
|
4205
|
4482
|
4386
|
4911
|
Market Share %
|
27
|
27
|
26
|
22
|
20
|
|
Stand-alone Health
Insurer
|
Rs in crore
|
1609
|
1688
|
2172
|
2828
|
3946
|
Market Share %
|
12
|
11
|
12
|
14
|
16
|
|
Industry Total
|
13,069
|
15,453
|
17,495
|
20,096
|
24,448
|
|
Annual Growth Rate (%)
|
18.5
|
18.2
|
13.2
|
14.9
|
21.7
|
Source: IRDAI Annual Report, 2015-16
Further, health
insurance business can be classified into Government Sponsored Health
Insurance, Group Health Insurance (Other than Government Sponsored) and
Individual Health Insurance. Among these three classes of business, the share
of government business was declining. [Table-2]
Table-2: Classification
of Health Insurance Premium
Class of Business
|
2011-12
|
2012-13
|
2013-14
|
2014-15
|
2015-16
|
|
Government Sponsored
Schemes
|
Rs in crore
|
2225
|
2348
|
2082
|
2474
|
2425
|
including RSBY
|
Market Share %
|
17
|
15
|
12
|
12
|
10
|
Group Business
|
Rs in crore
|
5948
|
7186
|
8058
|
8899
|
11621
|
(Other than Government
Business)
|
Market Share %
|
46
|
47
|
46
|
44
|
48
|
Individual Business
|
Amount
|
4896
|
5919
|
7355
|
8772
|
10353
|
Market Share %
|
37
|
38
|
42
|
44
|
42
|
|
Grand Total
|
13,069
|
15,453
|
17,495
|
20,096
|
24,448
|
Source: Same as
Table-1
In terms of
number of persons covered under health insurance, three-fourth of the persons
were covered under government sponsored health insurance schemes and the
balance one-fourth were covered by group and individual policies. [Table-3]
Table-3: Number
of persons covered under health insurance
Class of Business
|
2011-12
|
2012-13
|
2013-14
|
2014-15
|
2015-16
|
|
Government Sponsored
Schemes
|
persons in lakh
|
1612
|
1494
|
1553
|
2143
|
2733
|
including RSBY
|
% share of no. of persons
|
76
|
72
|
72
|
74
|
76
|
Group Business
|
persons in lakh
|
300
|
343
|
337
|
483
|
570
|
(Other than Government
Business)
|
% share of no. of persons
|
14
|
17
|
15
|
17
|
16
|
Individual Business
|
persons in lakh
|
206
|
236
|
272
|
254
|
287
|
% share of no. of persons
|
10
|
11
|
13
|
9
|
8
|
|
Grand Total
|
2,188
|
2,073
|
2,162
|
2,880
|
3,590
|
Source: Same as
Table-1&2
Now, after
having a practical acquaintance of four years with its style of functioning and
a conjoint reading of the above three tables (table 1, 2 & 3) could derive the
intent of the present government at the centre for enhancing insurance coverage
vis-à-vis premium amount under NHPS. They cannot remain as a silent spectator
when the private players are sliding down in a fast growing
health insurance market. Perhaps, it was only to facilitate the ease of doing
business for the private insurers, the fund allocation from the public account
was increased (coverage for government’s health insurance scheme jumps from Rs
1 lakh to Rs 5 lakh per family). The government has estimated an upward
revision of the premium for NHPS at Rs 1,000-1,200 per family per year. The
governments at the Centre and the states are already investing Rs 3,090 crore
in premiums for 33.5 crore population. The NHPS would add another 16.5 crore
persons for their target of covering 50 crore population with additional
premium amount. More and more people would ensure more and more money in
private insurers’ hands.
Not only would
the private insurers garner maximum profit, the scheme will also lead to a
significant increase in profits for the private healthcare industry, which is also
perhaps its intention. The Centre may ask states to incentivize private
hospitals and healthcare chains for setting up infrastructure and creating
trained manpower for the successful implementation of the NHPS. [Sharma 2018]
One must take a note that out of 7,226 hospitals empanelled by the government
for RSBY, 4,291 were private while 2,935 were public hospitals [Bhuyan 2018]
which suggests that the lion’s share of the public health fund is already lying
in the private hands. The new scheme would further facilitate the grabbing
despite the fact that there are widespread reports of profiteering by private
hospitals. These are referred to as “moral hazards” in the medical insurance
industry and are well-known across the world. [Sundararaman 2018] Experiences
from across the world show that it escalates overall healthcare expenditure
besides unethical practices and inappropriate patient’s care. In India, these
problems are likely to be more intense due weak governance and existence of
limited regulatory procedure for controlling the private sector. However, this
government at the Centre is hell bent to do anything for public health only
through private sector. This raises questions about the intent and credibility
of the present ruling regime.
Taxing the
common people:
The Budget has
announced an increase in the education cess from existing 3% to 4% as ‘health
and education cess’. This should bring in an additional Rs.11,000 crore to the
government exchequer. Of this additional amount, if 25% is spent for the health
sector, there should have been an increase of Rs.2,750 crore in the health
budget for this year. But, the increase has been only Rs.1,250 crore. This
raises doubts whether the government at the centre is only interested to get
additional revenues from the pockets of the common people in the name of
healthcare expenditure for the poor while opening the scope for the private
healthcare sector to garner more and more profit. The surge in the share prices
of healthcare and insurance companies, following the budget announcements might
tell the stories of actually who the real beneficiaries of the scheme should
be.
Conclusion:
Six days after
the Budget announcements were made, Prime Minister Narendra Modi on 7 February
tweeted (the initial content was removed): “Now is the time to give India a
healthcare system that makes quality treatment affordable. We will ensure this
through Ayushman Bharat”. [Modi 2018] Four days later, the tweet received only
9,158 ‘likes’ despite the fact that Modi has more than 4 crore twitter
followers. Earlier, on 1 February, Modi’s tweet was showered with 25,200
‘likes’ which mentioned, “Ayushman Bharat Yojana is a path breaking
initiative to provide quality and affordable healthcare. It will benefit
approximately 50 crore Indians. The scale of this scheme is unparalleled and it
will bring a paradigm shift in our health sector.” [Modi 2018]
The receding
numbers of ‘likes’ for Modi on healthcare could be enough indicative of the
popular discontent against his finance minister’s untruthful announcements and,
perhaps, the rhetoric have been exposed about creation of health and wellness
centres without sufficient groundwork. It is also understandable that the new
health protection scheme is actually a “paradigm shift” from public welfare to
private profiteering.
Precisely, when
the public healthcare system is put in the perils of private hand, all
stakeholders must continue with the public debate to keep the demand for the
right to health alive. Otherwise, people’s access to essential and equitable
healthcare would remain only good at announcements.
References:
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PIB
(2018): “Ayushman Bharat for a new India -2022, announced”
Press Information Bureau; Government of India;
Ministry of Finance; 1February,
2.
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Comes to the Rescue As Health Ministry Clueless on World’s Largest
Healthcare Programme”, Wire, 3 February,
3.
India
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Minister J P Nadda”, 2 February,
4.
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Modicare to cost govt Rs 1,100-1,200 per family every year”, Hindustan Times, 2
February,
5.
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Government to form council to roll out National Health Protection Scheme”,
Economic Times, 5 February,
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A (2017): “Of India’s healthcare spend, 2/3 out of patients’
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Insulated From Populism”, Wire, 3 February
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Sinha,
D (2018): “Why the Budget is Unhelpful and Unimaginative When It Comes to
Healthcare”, Wire, 1 February,
https://thewire.in/105024/why-the-budget-is-unhelpful-and-unimaginative-when-it-comes-to-healthcare/
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J (2018): “What the Centre’s New Health Insurance Scheme Means for States That
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Modi
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