The proposal to put a cap on the profit margins of private hospitals in drugs, consumables and devices by the Delhi government seems to be a good move, especially when the ghastly case of a big private hospital charging the parents of a child Rs 16 lakhs after she died of dengue is still fresh in our minds. Private hospitals are known for many types of malpractices like overcharging for syringes, gloves and medicines – and also often making it compulsory for patients to buy medicines from in-house pharmacies. The patient and his/her family are at a loss about what to do when presented with a highly inflated hospital bill.
Other States may follow the Delhi move, but just putting a cap on the profits of private hospitals will not solve the deeper malady of lack of affordable healthcare in India.
Unless the supply of public hospital facilities are enhanced and improved, private hospitals will keep overcharging the public regularly because they are forced to go them. As a result, the ‘out of pocket expenditure’ of patients in India is one of the highest in the world at 62 percent, and 70 million people sink into poverty each year due to the burden of healthcare. Monitoring profits of private hospitals is also not easy specially when there are many ways of evading the scrutiny of the regulatory authorities.
We know that many public hospitals in big cities have excellent doctors and surgeons but we are not able to access them. Why? This is because there are hardly any good medical facilities in villages and towns. If the primary and district level healthcare centres are good, well equipped with doctors and medicines, many patients would not have to come to big cities for diagnosis and treatment. The cost of public healthcare would also go down if patients are treated nearer their homes as timely treatment is important to avoid complications and the need for secondary and tertiary care.
The reason for inadequate healthcare in India is the low government spending on healthcare which has remained below 2 per cent of the GDP -- at 1.4 per cent. Healthcare is bandied about as a great election issue in State elections because health is a State subject but little is done afterwards.
Universal Health Coverage (UHC), in which there is free healthcare for all the citizens of a country, has been talked about for some time. UHC is available in the UK, the EU, Canada and many other countries. Under the UPA government, a high level expert group under the chairmanship of Dr. Srinath Reddy presented a detailed action plan in its report on the UHC. The Reddy Report clearly points out that the government expenditure on health has to be increased to 2.5 per cent of the GDP. The emphasis in the report was on prevention and primary health care which is usually ignored, neglected or even undermined by usual system of health insurance. The government, according to the report, should be the guarantor of UHC and it is linked with the Right to Health as it converts an aspirational goal into an entitled phenomenon.
UHC would depend on general revenues for the financing rather than an unsteady stream of contributory health insurance which offers, in most cases, incomplete coverage and restricted services. The idea of UHC was, however, abandoned by the Modi government and instead the Anshuman Bharat National Health Protection Mission (AB-NHPM) was proposed in the Budget 2018. It is a grandiose plan of guaranteeing up to Rs 5 lakh in treatment to around 500 million people on payment of a premium for their health insurance. The scheme is an important breakthrough in the healthcare in India but without adequate hospital beds, doctors and nurses any health scheme with such a large-scale coverage will remain a pipe dream.
There can be many glitches in the NHPM’s smooth functioning that covers 10 crore families belonging to the poor and vulnerable population based on the Socio Economic Caste Census (2011) and aims at benefiting 40 per cent of the population. It will subsume other existing insurance schemes like RSBY and Senior Citizen Health Insurance schemes. The beneficiary will be entitled to cashless hospital services from any public or private empanelled hospital across the country.
The expenditure incurred in premium payment will be shared between the Central and State governments. The Centre’s share will be Rs 10, 498 crore and States will spend Rs 6219 crore over the next two years. There will be different cost structures for different States, and therefore the premium outgo per family in each state will vary.
According to a study by the Federation of Indian Chamber of Commerce and Industries (FICCI), India’s public health expenditure has to go up to 3.7 per cent to 4.5 per cent of the GDP for the scheme to be successful (the global average is 5.9 per cent). There will have to be more hospital beds (from the current 0.9 beds per 1000 persons) and additional 9 lakh doctors for primary health care and 1.2 lakh specialist doctors in secondary and tertiary care. In 2017, there were only 10,22,859 doctors in the country which comes to less than one doctor (0.59) per 1000 population while the World Health Organisation (WHO) prescribes a minimum level of one doctor per 1000 population.
How efficiently the insurance companies will function in collecting the premiums and how well they will be able to cope in checking fraudulent claims is yet to be seen. The Health Ministry has proposed that insurance companies will have to mandatorily refund excess premium if the claim ratio turns out to be less than 85 per cent under the scheme to ensure that insurance agencies do not have windfall gains.
On the whole, successful medical claim management by the insurance companies and timely reimbursement to hospitals will be a challenging task ahead. There will have to be accurate documentation in all hospitals -- a difficult task at all times. Insurance companies will need an experienced workforce in the field of claim management on a large scale, requiring specific expertise. Biometric identification of the beneficiary may help stop leakages.
Many more problems will surface as the scheme gets implemented but the government has to make it work because it has promised affordable healthcare to nearly half the population — a promise which it has to keep.
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David Rusnok Researcher Strengthening National Climate Policy Implementation (SNAPFI) project DIW Germany
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