Government’s unkept vows of health insurance schemes

A recent study by Brookings India compared the findings from National Sample Surveys conducted in 2004 and 2014 on health care expenditures in India.
Government’s unkept vows of health insurance schemes

A recent study by Brookings India compared the findings from National Sample Surveys conducted in 2004 and 2014 on health care expenditures in India. The study examined whether government-funded health insurance schemes introduced in that decade had reduced the financial burden of health care on vulnerable populations. This was measured by three key indicators: out-of-pocket expenditure on health, catastrophic health expenditure, and health care—induced impoverishment.


The results indicated failure of central and state government-funded insurance schemes to provide financial protection. Health insurance coverage increased the probability of hospitalisation. Some of this would have resulted from greater access to needed, but hitherto unaffordable clinical care.

Some increase could have been due to unnecessary hospitalisation and inappropriate procedures resorted to by hospitals taking advantage of assured insurance payments (induced demand). There was a rise in out-of-pocket spending—mostly due to rise in spending by hospitalised patients.

This suggests that the insurance coverage was insufficient to cover the add-on charges in many cases. Catastrophic health expenditure, too, increased in rural and urban households. Consistently noted was whether the threshold for defining catastrophic expenditure was 10 per cent, 25 per cent or 40 per cent of usual consumption expenditure.


Health care-related expenditure remained a major and unchanged cause of poverty over 10 years, with 7 per cent of the population still being pushed in to poverty by its unaffordable cost.

This, despite the introduction and expansion of several government-funded health insurance schemes over the past decade. Rashtriya Swasthya Bima Yojana (RSBY) and a variety of state government schemes (such as Aarogyasri) were intended to provide greater health care access to vulnerable sections, who could not afford it.

The schemes were, however, limited to in-hospital care. Pre-hospital out-patient care and post-discharge follow-up care were not funded, though they cumulatively accounted for the largest fraction of out-of-pocket expenditure. While some patients have benefited from the greater access to in-patient care, the social objective of reducing the financial burden of health expenditure remained largely unserved.


So what went wrong? The foremost reason is the neglect of primary care. While increased rate of hospitalisation partly lifted the financial barrier to access, a large number of conditions that should have been prevented, detected early and treated effectively in primary care settings, were allowed to proceed to the stage of advanced disease requiring hospitalisation. Preoccupation of policy makers, with provision of hospital care, led to lack of investment in strengthening both rural and urban primary health care beyond the limited agenda of the National Rural Health Mission. 


Second, the inability of government agencies to undertake strategic purchasing led to hospitals taking advantage of the schemes to perform unnecessary procedures and pile on additional costs on patient. As the Centre prepares to launch a modified RSBY scheme this April, as National Health Protection Scheme (NHPS), there is need to correct these weaknesses. 


The High Level Expert Group (HLEG), constituted by the Planning Commission in 2010, pointed out serious shortcomings of the insurance route and pleaded for a principally tax-funded programme of Universal Health Coverage (UHC) to prioritise primary health care in the Environmental Health Perspectives.

The HLEG called for strengthening of public health care facilities, from sub-centre to district hospital, with well-regulated contracting of private providers as per need. National Health Mission and NHPS must work in a well-integrated manner, to provide essential services under UHC.
ksrinath.reddy@phfi.org

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