Calls for universal health coverage: Rethink insurance route

  • IASbaba
  • June 13, 2020
  • 0
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Topic: General Studies 2:

  • Government policies and interventions for development in Health sectors
  • Indian Economy and issues relating to planning, mobilization, of resources 

Calls for universal health coverage: Rethink insurance route

Context: While COVID-19 has exposed the fault lines of Indian Healthcare, it has strengthened the calls for Universal Health Coverage(UHC) as a long-term reform

In this regard, there seems to be an emerging consensus around expanding the coverage through Ayushman Bharat initiative

About Ayushman Bharat

  • Ayushman Bharat adopts a continuum of care approach, comprising of two inter-related components, which are:
    1. Health and Wellness Centres (HWCs).
    2. Pradhan Mantri Jan Arogya Yojana (PM-JAY).
  • It aims to bring quality healthcare to around 50 crore poor and vulnerable Indians (based on the Socio-Economic Caste Census (SECC) data)
  • PM-JAY is world’s largest health insurance fully financed by government which will provide free coverage of up to Rs 5 lakh per family per year at any government or even empanelled private hospitals all over India for secondary and tertiary medical care facilities.
  • Centrally sponsored scheme with contribution from both Centre and State 
  • Cashless access to health care services for the beneficiary at the point of service.
  • Wellness Centres: The 1.5 lakh sub-centres that are converted into wellness centres will cater to majority of services such as detection and treatment of cardiovascular diseases, screening for common cancers, mental health, care of the elderly, eye care, etc

Measures taken by Maharashtra

  • Universalising its state health insurance scheme, 
  • Free Covid-19 testing/ treatment under AB–PMJAY 
  • Express empanelment to encourage private sector participation in AB–PMJAY
  • Significance: These steps could be a prelude to universalisation of health insurance.

Learnings from COVID-19 pandemic

  • Strong public sector comes in handy during times of crisis.
  • States with higher per-capita public health spending have tackled Covid-19 better
  • Private healthcare interests aren’t particularly aligned with managing infectious diseases and emergencies. 
  • Private hospitals under health insurance often prefer high-paying, non-communicable disease-related interventions . 
  • The private sector’s weak response to Covid-19 under AB–PMJAY till date could be evidence of above observation.

Advantages of Universalisation of healthcare(UHC)

  • In ideal conditions, universal health coverage would extend to currently uninsured citizens and reduce financial barriers to care, both over a short period. 
  • Helps bring a large chunk of private healthcare under the public ambit
  • Reduces informality in healthcare provision, 
  • Paves the way for better regulation and oversight, 
  • Allows monopsonistic power to the state to negotiate for better and affordable care. 
  • It may also contribute to reducing regional disparities in healthcare services 
  • It helps foster the adoption of cost-effective healthcare innovations

Challenges with expansion of PM-JAY

  • While the lesson from the pandemic is to strengthen public healthcare, the insurance route to UHC could further weaken the public sector. 
  • Private providers would likely comprise an unduely large proportion of empanelled facilities under PM-JAY, and public providers, with their weak infrastructure, are bound to lose out. 
  • Expanding AB–PMJAY to the uncovered population through premium collections would be unpredictable given our huge informal sector
  • Typically, under-regulated private-sector-led insurance models fail to address the problem of the out-of-pocket expenses on health, and do little to address issues of equity and access
  • Insurance & Private sector led UHC also leads to large, unfruitful administrative expenses and pervasive malpractices.

Way Ahead – Robust Public Health Sector

  • While there is a need to carefully rethink the insurance route to UHC, the pandemic has indicated that strengthening public healthcare is unquestionably indispensable. 
  • Not only can a robust public sector enable mounting an effective response to future emergencies, but even if the insurance route is opted, it can provide a counterweight to the private sector through its efficient functioning.

Connecting the dots:

  • National Health System model of UK vs US Insurance Model
  • Increasing burden of non-communicable diseases – Critical analysis

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