Community health plan is nothing new

Ravi Duggal

Given the fiscal crises in the Indian economy and the economic slowdown, the expectations from this year’s budget were very high. The health sector also had a lot of expectations from this budget, especially the private health sector and private insurance. While all expectations were perhaps not addressed, the budget has given the health sector a fair share of attention.

The main highlight on the health sector, and the most talked about in the media, is the community health insurance plan suggested in the budget. While this gets a lot of media attention, it must be noted that it is not something new. Jaswant Singh’s predecessors, both Yashwant Sinha and Manmohan Singh, too had outlined similar plans but they never saw the light of the day. Whether Jaswant Singh’s plan will carry any weight we will have to wait and see.

To the credit of Jaswant Singh is the scheme he has outlined based on an existing scheme in Karnataka run by the Magsaysay award winner Dr H Sudarshan. Sudarshan’s scheme is very similar and includes the wage loss component. Now the question is whether Jaswant Singh will be able to make it work?

Dr Sudarshan has been working in the villages of two taluka’s near Bangalore where this scheme has been implemented in partnership with a public sector insurance company for two decades. The NGOs presence, their efforts at canvassing the scheme amongst the poor households, the negotiations with the insurance company, their monitoring and overseeing the scheme etc. are factors which have made it possible to implement it about a year ago.

How will Jaswant Singh synergise this into his scheme? Further, a health insurance program as envisaged in the budget will only work if its coverage is universal, that is it is made applicable to all. A voluntary scheme can never work in the context of mass poverty and lack of purchasing power.

While the FM has offered a subsidy of Rs 100 to below poverty line households, who will pay the balance of Rs 265 from amongst the poor? When survival itself is at risk for the poor, covering risk for hospitalisation from their meagre incomes does not make economic sense. Therefore, only a social insurance plan which has universal coverage will work. In such a plan those who have the capacity to pay will pay through payroll taxes and deductions in case of those employed on a regular basis and through insurance premiums for the self-employed and other occupational groups, but this will be only 40 per cent of the population. For the balance 60 per cent - the poor and subsistence groups the state will have to pay the insurance premium. The insuring agencies could be public or private but all such resources will be pooled into a single collective fund which will be administered by an autonomous corporation which will constitute the “single payment mechanism” agency.

But for such an insurance plan to work, it would require that the healthcare system is organised into a system (public-private mix) and is regulated. Insurance cannot operate in the unregulated environment of the present healthcare system in India, especially the private health sector. Thus without such systemic changes the FM’s health insurance plan will remain a non-starter like its predecessors.

The budget also had other significant measures for the health sector. Apart from the reduction of excise duties and customs tariffs for essential drugs, the FM gave a major largesse to the bio-technology and pharmaceutical industry by giving it a status similar to the IT industry for tax concessions. One can understand such support for bio-technology which is finding its feet but why the pharmaceutical industry which exports 45 per cent of total formulation production and earns super-profits. In fact many pharma companies from India are significant MNCs in their own right and by volume India is the fourth largest pharma producer in the world.

The budget also extends sops to the private hospital sector through tax concessions for hospitals which treat patients from abroad. The 2002 National Health Policy talked about promoting “health tourism” since we have world class healthcare facilities. Such concern in the national budget is uncalled for, especially given the fact that the private health sector has received so many concessions in the form of tax waivers (if they are Trusts or societies), tax and duty concessions in import of equipment, free or very cheap public land for building hospitals etc.

And all these have a social clause which the private hospital sector has never honoured, that of treating 10 - 20 per cent of the patients (read poor) free of cost. This very rarely happens and the agencies concerned who grant these concessions never monitor it too.

Anecdotal information suggests that some free treatments are indeed given but these are invariably bureaucrats, ministers and family and friends of doctors and other hospital staff!

Finally, it must be noted that healthcare is a state subject and hence it is state level budgets which are more critical because the state budgets account for 85 per cent of the public health expenditures. So we need to look at state budgets more closely to see how they impact the health of the people.

(The author is co-ordinator, Centre For Enquiry into Health and Allied Themes)