Premature celebration
Source: By Deccan Herald
India’s healthcare statistics are among the most woeful in the world. Under the circumstances, it can be nobody’s case that our poor, whose number exceeds 60-70 crore, do not deserve better and more affordable healthcare, both qualitatively and quantitatively. The twin measures of National Health Protection Scheme (NHPS) seeking to give a Rs 5 lakh insurance cover each for 10 crore families and the ‘Ayushman Bharat for New India 2022’ scheme, which proposes to strengthen the primary healthcare in the country with 150,000 health and wellness centres, announced during the Union budget, are welcome news.
The Indian insurance sector seems to be viewing the NHPS with great anticipation for the sheer quantum of revenue that it promises them. The anticipation towards their top line may not be misplaced, but the same can hardly be said about the bottom line. Here is why. Anyone who understands the basic principle of insurance understands that it is nothing but payment of a small price (the insurance premium – which contributes to the top line of the insurance companies) by the insured, to avert a large loss as a consequence of an event that may have a small probability of occurrence.
The probability of a house going up in fire, the probability of having to undergo a heart surgery, or kidney failure, or falling seriously ill and needing hospitalisation, etc., at any given point in time may be small, but the consequences of these on the savings of those so affected may be significant or even disastrous (especially for the poorest). Ordinarily, insurance companies assess the probabilities of the occurrence of the various insurable events (risk assessment), whether health-related, accident-related, crime-related, or any other event, and carefully determine the insurance premium for a given sum assured to the insured. That is, of course, in an ideal world; and ours is anything but. Why?
Because when we enter a hospital, the first question we encounter is whether we have insurance –- meaning, who is paying? The diagnosis as to the seriousness of our ailment, the number of tests we have to undergo, the charges for any of the procedures, the room rates, the charges for consumables, even the drugs prescribed (branded rather than generic), overheads and virtually every conceivable charge is significantly padded up. People who hardly need hospitalisation are hospitalised. In a fair world, even the question ‘who is paying?’ should be construed illegal, or at least unethical, in healthcare.
These bloated charges are bound to result in bloated outflow for the insurance companies. While it is relatively easy to assess the probabilities of insurable events, how does one assess the ‘extent of bloating’ of the charges by the hospitals? Of course, as these charges are bloated, insurance companies may accordingly bloat the premiums to be paid by the patients to protect themselves. But would that not make healthcare much more expensive for the poor, and predispose the initiative to doom? But, can such padding up of the charges leave the quality of healthcare delivered by the hospitals unaffected? No. This is because such a system gives every conceivable incentive to the hospitals to convert themselves into glorified pathology labs, which is where profitability is the highest.
India’s adverse doctor-to-population ratio is well-known. We are supposed to have one doctor to every 1,670 patients on average, which is about half the world average. That does not sound very bad — until you realise that the total number of doctors in India is about eight lakh, of which less than 20% doctors are in rural India. Some estimates put the number at about 15%, which implies that in rural India (say a population of 70 crore), there is only one doctor for a population of 4,000 to 6,000.
Incidentally, under the existing public healthcare system (comprising community healthcare, primary healthcare and sub-centres), there are only 50,000 doctors in rural India, covering a population of 67 crore, that is one doctor for every 14,000. And we aren’t even referring to the quality of healthcare delivered in the government hospitals yet!
This then is Government of India’s record hitherto, and it is to overcome precisely this deficit that it has mooted the populist insurance scheme, hoping for the private sector to enter where the government itself has failed, considering less than 28% of rural India accesses the government’s decades-old healthcare scheme. Much of the private healthcare space in rural and semi-urban centres are taken over by shoddy and exploitative private hospitals and nursing homes which, as we noted earlier, have every incentive to short-circuit health-delivery for private gains, under the supervision and regulation of the super-sick Medical Council of India.
That is why the Indian insurance sector needs to worry. That is why, while the poor may have health insurance, what they shall have in reality will be a better-worded apology of healthcare, not healthcare itself. So, if these measures are to actually lead to a healthier India, we need to ramp up the health infrastructure in real terms, upon which actual healthcare delivery depends, rather than depend on nice-sounding financial engineering measures like insurance riding on the shoulders of shoddy infrastructure.
But, of course, we can hardly disregard the fact that governance in our country in the last 70 years has been dotted with impressive sounding schemes into which not just thousands of crores, not even lakhs of crores, but crores of crores of rupees have been poured, with not more than a trickle ever reaching the deserving and the needy. Which is what explains the state of affairs of the country on any important parameter of development despite all that money invested much of which has ended up in the pockets of politicians and their cronies.
[printfriendly]
