April 20, 2008

The cashless health insurance cover for the 300 million poor is most welcome; but then, a lot would depend on the scheme's implementation!!!

At a point in time, when millions of poor and disadvantaged households across the nation are reeling under the scorching rise in prices of basic goods and commodities, the recent announcement of the Government of India (as suggested by the National Commission for Enterprises in the Unorganised Sector) to provide a cashless health insurance scheme for the 300 million people below the poverty line, has been a welcome relief! In fact, the scheme was announced by the Honourable Finance Minister, Mr P. Chidambaram, during his Union Budget speech this year itself. As per the announcement, the scheme is slated to cover all the 300 million people below the poverty line, within the next five years. It is estimated that the premium per family will come to Rs.750, of which the Centre will be paying 75% and the rest 25% will be borne by the respective state governments. The Planning Commission has announced that the entitlement of the benefits to the people would be determined by the respective state governments. And the current proposition is that the hospitalisation expenses will cover most common illnesses, pre-existing diseases, as well as transportation costs within an overall limit of Rs.1000! The proposal also states that state governments would also be responsible for selecting the health insurance provider through a tendering process!

Though very late, it is indeed one of the most welcome steps from the current Government! In fact, we at the IIPM Think Tank, over the last couple of decades, have been aggressively advocating on the very fact that it is imperative to secure the health of each and every citizen of the country, not only on moral grounds, but also because the positive externalities emanating from a healthy population are huge and have sustainable impacts on the economy over the long run. In addition to these, such a scheme was an imperative as the health costs in India have been spiralling over the years. Another reason for a blanket health cover (particularly for the poor and disadvantaged) manifests from the scenario where public health infrastructure currently is in such an appalling state, that as of now, 95% of the out-of-pocket expenditure of the Indian population goes to private healthcare, a figure which has been increasing at a galloping pace!

As a result of this, it comes as no surprise that those are health costs that are some of the prime reasons for pushing millions of already poor Indian households further below the poverty line! Moreover, it is also observed that it actually does not cost much to provide a blanket health cover to all the people below the poverty line. Like in this case, the total cost comes to a mere Rs.450 crores (considering 60 million households, with an average of five members per household getting the health insurance cover), which means that all it needs is just an allocation of 0.01% of our GDP to ensure a basic healthcare cover for a whopping 300 million people!!! In fact, the Government should have gone a step ahead in terms of providing a more comprehensive health insurance cover, which could have ideally included surgeries as well, because it is the cost of surgeries that has been burning the biggest holes in the pockets of the poor! But then, considering that it is just a start, and that too in the right direction, one can only expect it to get better with time!

Though on paper, the scheme might look brilliant, its success would depend heavily on its implementation. And it is here that I have my apprehensions. My first apprehension stems from the fact that those are the state governments that are responsible in determining the entitlement benefits, and also responsible to decide whom the insurance contract is finally awarded to (though through a tendering process). Going by precedence, there are considerable chances that this novel attempt by the Centre can get completely marred by corruption at the state level. My second apprehension is over the severe shortage of doctors and paramedics that India is currently facing. As per the Planning Commission, India is currently facing a deficit of almost 6 lakh doctors, 10 lakh nurses and 2 lakh dental surgeons! The pathetic reality is that the patient to doctor ratio stands at a dismal 10,000:1! This appalling situation is on account of unstoppable drain of doctors and paramedics from India to various foreign destinations. So, howsoever novel the Government’s intent may be, this monumental shortage of medical personnel will stand as a major roadblock to the scheme’s success.

My last apprehension, and obviously the biggest one, is to do with the fact that even this scheme might get into a similar rut like other government backed social schemes, wherein there is a complete lack of focus and commitment. And if this happens, then most unfortunately, a scheme which can completely change the face of the poor and destitute of this country, would again lie in a shambles!

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