Why it's unfair to criticise 'Modicare'
Few other announcements in the Budget have grabbed as much attention as the proposed flagship National Health Protection Scheme. The proposal, being hailed as the largest government funded healthcare programme with 50 crore potential beneficiaries, is grand in its scope and audacious in its ambition. To criticise the announcement, even when the details of the scheme are not public, is not only premature but also unappreciative of the importance of the scheme.
Over years, an increasing number of patients are opting for private healthcare providers as the state-run healthcare system has proved inadequate in meeting the needs of the patients. The fourth National Family Health Survey (NFHS-IV) conducted in 2015-16 found that 51 per cent households in India received healthcare from private provideRs This preference for private providers exists even among the lowest wealth quintile with over 48 per cent of these households opting for private health services. With less than 28.7 per cent households having some kind of health insurance (with the proportion dropping to 21.6 per cent for the lowest wealth quintile) to cover the medical costs, availing a private health service means that the expenses (often large) are borne by the patients themselves.
As per National Health Accounts (NHA) 2014-15 estimates, over 67 per cent of the current health expenditure in the country or about Rs 3,02,425 crore is out-of-pocket expenditure (OOPE), out of which over Rs 96,000 crore are spent on inpatient care alone. These expenses have a disproportionately large impact on the poor and low-income households leading to further impoverishment. The need to address this situation is glaring and the proposed scheme rightly aims to do so. The scheme is indicative of a pragmatic approach taken by the Narendra Modi government as it recognises the fact that over reliance on public healthcare systems as the sole delivery mechanism is costing the poor while implicitly recognising the principle of patient choice. This policy shift is important as it fundamentally rethinks the role of the state in delivering healthcare to the people.
Some critics have argued that the proposed scheme will not be effective and that it would lead to the demise of the public health care system even when the contours of the scheme are not yet known. These arguments are not borne out of facts. Whichever specific form the scheme takes when finalised, it is clear that it would involve purchasing health services through insurance products with the premiums being covered by the government.
Schemes on similar lines have been implemented by some states such as Gujarat and Andhra Pradesh. These schemes have been highly successful and popular among the beneficiaries. Data from NHA 2014-15 shows that the health expenditure financed through social insurance schemes is almost equally split between government and private hospitals. Hence, it is clear that the scheme will bring much-needed resources to government hospitals too, contrary to claims that it would redirect resources to the private sector. Moreover, the Budget allocations for public health infrastructure under Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) have been retained at the same levels along with a 16 per cent increase in the allocations for Health Systems Strengthening under the National Health Mission make it clear that the intention of the government is not to replace the public health system with the introduction of NHPS but to augment it.
The cost of the scheme for the government has also garnered a lot of attention as some have claimed that the scheme could cost as much as Rs 50,000 crore while others have estimated an even higher cost. Premiums under the current Rashtriya Swasthya Bima Yojana scheme range between Rs 163 and Rs 799 per family (with an average premium of Rs 520) for a coverage of Rs 30,000. With the expansion of the scheme, a larger insured pool, economies of scale and competition among insurers would drive the premiums down. Niti Aayog's estimates of the premium being between Rs 1,000 and Rs 1,200 per family for a coverage of Rs 5,00,000 therefore seem feasible. As the scheme would be implemented as a Centrally Sponsored Scheme, the Centre's share would amount to about Rs 6,000 crore to Rs 7,200 crore. With an allocation of Rs 2,000 crore already included in the Budget (with a 60:40 split between the Centre and states, and a 90:10 split for northeastern and hill states), it would not be difficult to cover the remaining amount through supplementary demands as the scheme is rolled out during the year.
The scheme also brings along considerable secondary benefits such as incentivising public hospitals to compete with private hospitals, encouraging the use of e-health records among hospitals, institutionalising standard clinical pathways and improving accountability of medical service providers due to improved documentation and traceability.
Looking at these facts, the criticism seems misplaced both in its principle and its timing. It also seems to be deriving from an ideological preference for the public health system at the cost of the poor patients who are being deprived of quality health services. The scheme proposes a re-conception of the traditional thinking on health care and with the immense potential benefits, it looks like a bet worth taking.