Need for assurance, not insurance, in health

An overburdened and fund-starved network of public health institutions and a small private sector, mostly in the tertiary area, further make healthcare inaccessible to large sections of society.

Published: 18th April 2022 12:30 AM  |   Last Updated: 17th April 2022 11:53 PM   |  A+A-

Insurance

Image used for representational purpose only.

In the Bandhua Mukti Morcha v. Union of India (1997), the Supreme Court held Right to Health as a part of the Constitution under Article 21 and ruled that this was to be interpreted as social security from disease and assistance in times of sickness.

India's public expenditure on health for years has been around 1 per cent of the GDP. It ranks 170 among 189 countries in prioritising healthcare in the Budget as per the Economic Survey 2020-21. Further, 58.7 per cent of total health spending is out-of-pocket expenditure. This is estimated to be a humongous Rs 3,40,196 crore. An overburdened and fund-starved network of public health institutions and a small private sector, mostly in the tertiary area, further make healthcare inaccessible to large sections of society.

Insurance vs. assurance models, a comparative analysis: Around the globe, entitlements provided by Right to Health have evolved over time with models of health insurance and assurance being conceptualised on principles of single payer, multi payer, private players and nationalisation.

In India, the introduction of the Rashtriya Swasthya Bima Yojana (RSBY) hugely improved the access of those living below the poverty line to health insurance.

Launched in 2008, the RSBY beneficiary with a biometric smart card could avail free in-patient care of up to Rs 30,000. While the RSBY was applauded for this innovation in the sector, many challenges with the enrolment of beneficiaries, low uptake of services and no significant reduction in out-of-pocket expenditure along with inadequate coverage emerged.

Later this was subsumed by the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PM-JAY). PM-JAY's focus is on financial risk protection and combating high hospitalisation costs rather than universal access to healthcare and guaranteed state assurance of healthcare services.

The 50 crore PM-JAY beneficiaries can receive cashless treatment up to Rs 5 lakh per family now for 1,592 packages. This covers the cost of hospitalisation, treatment procedures along with just three days of 'before care' and 15 days of 'aftercare' as earlier in RSBY too. The out-patient costs continue to remain excluded. In its review, even the Standing Committee on Health (2018) held that PM-JAY would be an upgrade over RSBY if out-patient treatment was covered.

Three years since its launch, Delhi, West Bengal, and Odisha are still not on board with the Central scheme. While Delhi and West Bengal implement their separate state health insurance schemes, Odisha implements the Biju Swasthya Kalyan Yojana (BSKY), a state assurance scheme.

Treatments under BSKY cover both in-patient and out-patient services that can be availed cashless at all government hospitals and 208 private health institutions empanelled under the scheme by now. Any individual can walk into any government and empanelled hospital to claim healthcare services at no cost and without any cash exchange.

This is a huge improvement over the Central scheme and even the earlier RSBY. Besides, women’s health and reproductive rights have been prioritised with assured healthcare services up to Rs 10 lakh health coverage per year, which is only Rs 5 lakh under the Central scheme. Men have a coverage up to Rs 5 lakh per year just as the Central scheme.

This flagship Universal Healthcare programme of Odisha has been designed with a distinct method of financing. Government hospitals directly receive allotments from the Budget according to the uptake of in-patient and out-patient services instead of empanelled hospitals being reimbursed later by an insurance agency or the state health authority as in case of PM-JAY. This upfront funding has allowed early purchase planning of necessary consumables and implants. Under PM-JAY, the reimbursement process with inter-state variations is marred by claim issues, fraud and delay.

While the percentage of claims paid was found to be between 75-90 per cent in many states in the year 2019-2020, it was abysmally low in Rajasthan (32 per cent), Karnataka (49 per cent) and Goa (1 per cent). But the health financing of BSKY is empowering and assures hassle-free healthcare services free of cost for about 80 per cent of the total population of Odisha, approximately 3.5 crore (out of 4.5 crore) covering 96.5 lakh families/households.

Besides, PM-JAY is narrow as it includes only in-patient services such as hospitalisation and treatment-related free provision of medicines, tests, and diagnosis. Out-patient care, which is a large proportion of out-of-pocket health expenditure, is not covered. After the launch of BSKY in 2018, a 26 per cent rise in out-patient services was noted the following year as beneficiaries availed them for free irrespective of their income, status or residence.

The provision of complementary services such as free drugs, diagnostics and dialysis has massively broadened accessibility of the poor to public healthcare facilities. The recent introduction of smart health cards under the BSKY scheme is a true game-changer in the healthcare sector in the entire country. These smart health cards contain details of the beneficiary family to facilitate paperless and cashless transactions in Odisha. Thus, the BSKY scheme is much more encompassing as regards access, coverage, affordability and quality of healthcare compared to PM-JAY.

Although Odisha’s allocation on health is above the national average with 6.4 per cent of its total Budget expenditure, financing a universal healthcare scheme is a Herculean task for governments around the world. But the Odisha government, under the leadership of its low-profile CM Naveen Patnaik, has taken up this challenge despite its meagre resources. In 2023, BSKY could cost Rs 6,000-Rs 8,000 crore. But this cost is very low when compared to loan waivers, NPA, etc.

The NITI Aayog in a recent report also pointed towards the limited coverage under PM-JAY and suggested inclusion of out-patient services while commending the extensive coverage of the BSKY as "comprehensive... and covers the missing middle". Therefore, Odisha’s model of assurance-based universal healthcare is, no doubt, inspirational and one that all Indians deserve.

(The author, whose views are personal, is a Rajya Sabha MP for BJD, ex-CAG bureaucrat with a PhD in management and now an advocate. He can be reached at amar_patnaik @yahoo.com)



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