Relevance: GS Paper II (Development & Welfare)
A healthy population is a key contributor to the development of human capital, which, in turn, is the primary ingredient for growth.
Health expenditure in India
- According to the World Bank, health expenditure as a percentage of gross domestic product (GDP) in India was 3.8% in 2015.
- This was 16.8% for the United States and 9.9% for the world as a whole.
Significance of health insurance
- Fifteen percent of the Indian population is insured, and 94% of the health expenditure is paid by individuals out of pocket.
- Hence, health shocks have the potential to drive individuals and families into perennial debt traps.
- Providing the poor with health insurance not only can improve the health of individuals, but it has much bigger potential positive spillovers. It might be the key to driving families out of the vicious cycle of poverty.
Provisions of the Ayushman Bharat
- Ayushman Bharat—National Health Protection Mission (AB-NHPM) is to provide coverage of ₹ 5 lakh per family.
- It will target more than 100 million families belonging to the poor and vulnerable sections of the population, based on the Socio-Economic Caste Census (SECC) database.
- It will also provide primary care assistance by upgrading the government health centres.
- The insurance amount has also been increased to ₹ 5 lakh.
- There are also plans of digitisation of the entire process.
- The government aims to cover 40% of the entire population.
Issues with Ayushman Bharat
- One of the major issues with the scheme is how to make it sustainable as it will further add to the fiscal burden. Also, since state governments have to bear 40% of the costs, this would further add to the fiscal burden of the states.
- About 80% of doctors and 75% of dispensaries are serving urban India, which makes up only 28% of the country’s population, leaving the rest in dire need of basic health facilities.
- There are only 0.9 hospital beds per 1,000 population, whereas the figure is 6.5 per 1,000 population for developed countries.
- India had access to 0.6 doctors per 1,000 population while the figure was around three for developed countries.
- Lack of government health services would result in dependence on the private sector which will skyrocket the costs.
- Given the fact that the health insurance covers private facilities, this might be an encouragement for government doctors to go in for private practice or set up private nursing homes,
- Since people know that they have access to expensive private hospitals, they might choose to use their services for even minor ailments.
- It might also encourage people to save less and indulge in more risky expenditure like on cigarettes and tobacco.
- If malpractice is not kept in check, it is very easy to exhaust the entire insurance amount in one go.
We require monitoring agencies that will look into all these aspects. AB-NHPM has a lot of potential, but it might turn into a nightmare if not carefully implemented. These issues need to be kept in mind by the policymakers. We also need better data so that the various dimensions can be analysed.