How (not) to achieve Universal Health Coverage

By Susrita Roy, Research Associate at CPR

The concept of Universal Health Coverage (UHC) is guiding health policies across the world today, and India is following suit. UHC would mean that all of us will have access to affordable, accountable and appropriate health services of assured quality irrespective of our economic and social status.The government’s role will be both to guarantee and enable access to these services. Sufficient commitment toUHC by 2022 has been expressed by both the current as well as the erstwhile government. While the previous government had incorporated many of the recommendations of the High Level Expert Group for UHC in the 12th FYP, this government has taken a visionary leap in the National Health Policy 2015 (draft) to propose “health as a fundamental right, whose denial should be justiciable”. However the approach adopted for praxis of UHC is what is confusing and often contradictory. One important contradiction is financing of health care through medical insurance.

Riding on insurance

Though the ruling party at the centre has changed, the Government’s appetite for financing health care through medical insurance seems to have carried over. The 12th FYP formulated by the UPA government had proposed to reform the Rashtriya Swasthya Bima Yojana to “enable access to a continuum of comprehensive primary, secondary and tertiary care” especially for the BPL sections. And more recently the Union Budget 2015 has also promoted the financing of health expenditure through insurance by hiking the deduction on health insurance premium by more than 60%. There has been a deduction on the premium paid by senior citizen, but that is for only 9% of the population who are already vulnerable.

Whom does this hike affect? Largely it seems to affect only those of us who pay taxes and have medical insurance, and without doubt it is good news for us. Besides reduction in taxes, the good news may be at two levels, we can get more cover for our medical needs and also with this additional cover we can access services of corporate hospital instead of a private nursing home or a public sector hospital. And without doubt it is good news for both the insurance companies as well as for the private hospitals. The government has definitely guaranteed them profits.

Challenges for the UHC

However, this is bad news for achieving the goals of the UHC, especially when the allotment for public health programmes has not increased substantially from last year. Based on experiences of developed countries like Germany, which has a health care system financed through insurance, certain roadblocks for UHC can be identified. Firstly, with more people accessing services from secondary and tertiary health institutions, the ‘gatekeeper function’ that primary level care h performs will not continue. In the event of a disease outbreak (like H1N1 at this time), we will have to go to a private hospital, which may or may not admit us. The second problem will be an increased focus on curative services, instead of preventive and promotive care. Given that there is inherent asymmetry of information in the supply and demand of health care, this could imply that as patients we may be subjected to unnecessary tests and procedures that make money for private hospitals. Thirdly, with the rise in lifestyle diseases which medical insurance does not adequately cover, we will have to incur higher out of pocket expenditures for medicines and tests. Fourth and most important is that medical insurance will never reach the poor, who are a risky target for insurance companies due to the inherent vulnerabilities. For all these reasons, a health care system based on insurance can and should never be a way to UHC.

A long term view

If the insurance based model of financing healthcare is not viable, the only option is to expand the coverage of public health services as is available in many countries who have achieved UHC or those with good health indicators like Sri Lanka, Canada etc. The common indicator of comparing India with the countries is the government’s expenditure on health. By that measure India is surely very backward. It is well established that investing in public sector health services are far more equitable than any form of private provisioning as well as private financing.

However what gets missed out in these comparisons is the tax structure across countries. Based on the experiences from these countries, it may be advocated that India needs to raise the available resources through increasing taxes, especially direct taxes. This is the only way that the benefit of economic growth can be distributed among the entire population, of which health is an important one. However the current budget has not paid much attention to this issue; instead it has tried to appease tax payers by increasing deductions on taxes. If the current government is serious in making health a right, then it should shed these populist measures and shift to generating more revenues, which will not only increase spending in health but also other social sectors, all of which have seen budget cuts in the current fiscal year.


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