When ‘Universal Health Care/Coverage (UHC)’, considering a critical socio-economic national responsibility’, has been implemented by the Governments in a large number of countries across the world, why has it still not been effectively addressed by the successive Governments in India, garnering adequate resources, at least, for its phased roll-out in the country?
According to published reports, not just all the developed countries of the world, a good number of developing nations too, including some in Africa, have various kinds of UHC mechanism already in place.
Even within the BRIC countries, India is still a laggard in this area.
Health related major national initiatives of this kind and scale, not only effectively addresses the issue of access to affordable healthcare for all, ensuring high quality of public health environment for a healthy society, but also helps improving economic productivity maintaining a healthy work force.
It goes without saying, UHC helps reducing ‘out of pocket expenses’ towards health, significantly.
OECD Health Statistics 2014: How does India compare?
Total health spending of India with only around 4.0 percent of GDP in 2012 was less than half the OECD average of 9.3 percent.
Public health spending usually tends to rise with the economic growth of a nation. However, despite high GDP growth in the past two decades, India ranks well below the OECD average in terms of per capita health expenditure, with spending of only US$ 157 in 2012 (calculated based on purchasing power parity), compared with an OECD average of US$ 3484.
It is indeed an irony that with highest billionaire wealth concentration, India still tops malnutrition chart in South Asia. (I discussed this subject in my blog post of January 26, 2015.)
Public sector usually becomes the main source of health funding:
In nearly all OECD countries, the public sector is the main source of health funding. However, in India, only 33 percent of health spending was funded by public sources in 2012, a much lower share than the average of 72 percent in OECD countries.
In India, health accounted for only 4.8 percent of total government spending in 2012, significantly lower than the 14.4 percent across OECD countries. Out-of pocket costs accounted for 60 percent of health spending in India in 2012, higher than in any other OECD country.
This trend has not improved much even today.
UHC deserves public funding:
In almost all OECD countries, including many developing nations, as well, UHC remains a key area of public health funding.
Interestingly, very often UHC is projected as an idealistic social goal that is within reach of only the prosperous countries of the world. This is indeed a myth, as UHC is in place also in countries like, Bangladesh, Sri Lanka and even Rwanda in Africa, besides South-East Asian countries, such as, Japan, South Korea, Taiwan, Thailand, Singapore and China.
The strong relationship between health and economic performance of a country has now been well established globally.
Many case studies covering both the developed and developing nations, clearly point out that a country’s desirable focus on UHC does not just increase the life expectancy of its people, in general, but also facilitates economic growth in a sustainable way, which India is so keenly working towards.
Expectations for UHC received further boost from the new Government:
Just before the Union Budget Proposal 2015-16, in November 2014, national media reported: “ ‘Modicare’ to introduce free medicines, health insurance for citizens”.
It highlighted that in a major health sector reform, the new Government would ensure that every resident in India has access to affordable healthcare with provisions for free essential medicines while bringing over a dozen of diseases, including cancer and heart ailments, under the ambit of the proposed National Health Assurance Mission.
Another pre-budget media report on December 30, 2014, flashed: “The National Health Assurance Mission (NHAM) set to roll, once PM Modi gives go-ahead”.
It articulated, NHAM that has been in the works since 2011 when the erstwhile Planning Commission’s expert group submitted its report on UHC, is likely to take final shape in 2015. PM Narendra Modi is, however, still to see the presentation.
NHP 2015, bolstered hope for early adoption:
On December 31, 2014, when the present Government was in the midst of a series of major policy announcements for the country, The National Health Policy 2015 (Draft) was also released, further bolstering the hope for early adoption of UHC.
I discussed a related issue in my blog post of March 16, 2015 titled, “With Frugal Public Resource Allocation Quo Vadis Healthcare in India?”
Affordable ‘Modicare’ overshadows even ‘Obamacare’?
Universal Health Care (UHC), as narrated in the National Health Policy (NHP) 2015 (NHP 2015 Draft) of Narendra Modi Government, making health a ‘Fundamental Right’ for Indian Citizens, is indeed profound in its both content and intent.
In this article, I would term the new health policy as ‘Modicare’, just as many others did. If implemented in letter and in spirit, as it has been proposed, NHP 2015 has the potential to overshadow even ‘Obamacare’ of the United States…hands down.
A change in the fundamental narrative:
UHC, as detailed in NHP 2015, changes the fundamental narrative of the country’s approach to extend healthcare services to all Indians, irrespective of caste, creed, income level, age or any other pre-determined and conceivable parameters.
However, for this purpose, Modi Government would need to double the public healthcare expenditure from its current level of less than 1 percent to 2.5 of the GDP. It was also indicated that the required fund would be raised by levying healthcare tax to citizens, directly or indirectly.
Government to assume a key role in healthcare:
Currently, private players are playing dominating role with around 70-80 percent share (around US$ 40 Billion) of total healthcare services domain in the country. In other words, public healthcare services cater to no more than 20 percent of the total market, and mostly are of dubious quality standards.
It is interesting to note, NHP 2015 places the Government as the major provider of quality healthcare services for all. However, an individual would have the right to opt for private facilities, of course by paying significantly more.
The business scenario could change dramatically for private sector:
In NHP 2015, the Government becomes the major provider of UHC services. The private sector healthcare players would then probably require going back to the drawing boards to reorganize their business models.
They may well choose to embrace Public Private Partnership (PP) initiatives related to UHC or decide to turn into to niche players in the high-price private healthcare space or something else, as they would deem appropriate. But surely, they would have to take a step or two back from the current dominant role, where there is virtually no competition from the public sector, even in the mass healthcare market.
NHP 2015, underscores the need for affordable drug prices. Thus, the private players could also face tough pricing pressure, as well, while negotiating for large Government procurement.
Both the above issues, when put together and in perspective, would probably not make the private healthcare players terribly enthused or feel at ease. In that scenario, the Government has its task well cut out, mainly for navigating through tough resistance coming from both the national and international lobby groups, in the process of implementation of ‘Modicare’ in India, of course, if it fructifies any time soon or at all.
No control on quality even in private healthcare services:
In India, besides medicines, there is no quality control on any healthcare services, be it public or private.
As public healthcare services are hardly available to a vast majority of Indian population, common people remain virtually at the mercy of pricing diktats of the private healthcare providers, while availing the same. They usually do not have any inkling for high cost of such services, which generally follow the simple ‘demand and supply’ market economy model.
With the implementation of NHP 2015, the Government being the single largest buyer and provider of both healthcare products and services, would presumably negotiate hard both on quality and prices with the respective suppliers, benefitting the patients immensely.
Moreover, since Indian citizens would be paying for healthcare on an ongoing basis through direct and indirect taxes, NHP 2015 proposes free medicines and diagnostics facilities to all, as and when UHC would roll out.
Quietly comes the dampener:
When the Union Budget 2015-16 raised the national allocation for health only by 2 percent over the previous year, it literally extinguished the hope for healthcare reform in India, any time soon, even in a phased manner.
Central budgetary allocation for this initiative is very important, as UHC has been planned to be funded both by the Union and State Governments in 75:25 ratio.
In this intriguing phase, Reuters came out with the ‘Breaking News’.
On March 27, 2015, it reported, though the health ministry developed NHP 2015 on UHC in coordination with the prime minister’s office last year, along with an expert panel, including an expert from the World Bank, Prime Minister Narendra Modi has asked for a drastic cutback of the ambitious healthcare plan after cost estimates came in at US$18.5 billion over five years. Consequently, this would delay a promise on healthcare made in his well-publicized election manifesto, indefinitely.
Prime minister Modi’s manifesto, ahead of 2014 parliamentary election that brought him to power, accorded “high priority” to the health sector and promised a ‘Universal Health Assurance’ plan. The manifesto also said, previous public health schemes that have been mired in payment delays, had failed to meet the growing healthcare needs of the public, the above report highlighted.
Initially, the new Union Health Ministry reportedly proposed rolling out the system from April 2015, and in October 2014 projected its cost as US$25.5 billion over four years.
By the time the project was presented to Modi in January 2015, the costs were already brought down to US$18.5 billion over five years. Even that revised estimate was considered too much and the program was not approved by the Prime Minister, without assigning any timeframe even for a relook.
The delay in ‘Modicare’ is intriguing:
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