More health funding key to wider insurance net

 (Photo: Ramesh Pathania/Mint) (Photo: Ramesh Pathania/Mint)

NEW DELHI: In its first term, the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) made healthcare its priority and launched a raft of initiatives, including its most ambitious effort, the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY).

Ayushman Bharat has committed to provide health insurance of up to 5 lakh per family bringing within its scope a staggering 500 million people. The good news, based on the insurance claims so far, is that the scheme is gradually gaining acceptance. The bad news is that the finance minister will have to eke out the funds from within an already stretched Union budget.

“To reach the stated goal of 2.5% of gross domestic product (GDP) as public financing for health by 2025, up from the current 1%, Union budgets have to allocate more funds for health. As two-thirds of the funding comes from the states, the Union budget of 2019 should send a clear signal to the states by increasing central funding by 25% over the 2018 budget," said professor K. Srinath Reddy, president, Public Health Foundation of India.

Ayushman Bharat aims to provide free health cover of 5 lakh per family on a floater basis to more than 100 million families, which is about 40% of the population. Experts believe that even the non-poor need to be insured, given the rapid shift in the country’s disease burden towards non-communicable diseases such as cancer.

“Due to low penetration of health insurance in the country, out-of-pocket spending for healthcare services is very high. One major reason why health insurance has still not penetrated most of India is that it is optional. The weaker section has been covered through Ayushman Bharat and the government has taken significant efforts to implement it, but it needs to make health insurance coverage mandatory for all citizens in a phased manner, starting with the organized sector," said H. Sudarshan Ballal, president, Healthcare Federation of India (NATHEALTH), an industry body.

“Scaling up of Ayushman Bharat will ensure access to preventive and curative care of sufficient quality and will safeguard people from financial distress. To create a robust healthcare ecosystem, a priority sector status and budgetary provisions for universal health insurance would play a critical role," he said.

As Ayushman Bharat’s net widens, the burden on the healthcare system is expected to grow. This will also require a strong primary care system. India at present faces a huge shortage of doctors.

“Thorough assessment and investigation at the primary or secondary care level can lead to significant saving of resources at the tertiary level. The government should facilitate continuous medical education to upgrade skills of paramedical staff, which can solve the problem of shortage of trained doctors," said Savitha Kuttan, founder and chief executive officer of Omnicuris, a health tech startup that provides digital medical training to medical practitioners.

The healthcare sector also faces the challenge of funding huge capital investments to set up hospitals, while the returns are low.

“Access to timely credit with priority status and creating a specific fund for healthcare infrastructure and innovation would ease availability of capital for the sector. These funds would encourage entrepreneurship and newer business models to improve access, availability and quality of healthcare, especially in tier 3 and 4 cities and rural areas. The government can consider providing the seed capital for such funds," Ballal said.

He suggested a pilot effort where employees from the organized sector could be given the option of paying their employees’ state insurance (ESI) contribution or purchasing insurance from a regulated insurance company.

Representatives of the health industry also said they would expect the budget to focus on incentives for medical value tourism, and zero goods and services tax on healthcare services and health insurance premiums.

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