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Making Healthcare a Public Good – Inverting the Political Economy

Making Healthcare a Public Good – Inverting the Political Economy. Ravi Duggal rduggal57@gmail.com. Current Political Economy of Healthcare. Public healthcare services – Tax Financed Private healthcare – OOPs/Insurance Private Individual Health Insurance – public sector and private sector

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Making Healthcare a Public Good – Inverting the Political Economy

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  1. Making Healthcare a Public Good –Inverting the Political Economy Ravi Duggal rduggal57@gmail.com

  2. Current Political Economy of Healthcare • Public healthcare services – Tax Financed • Private healthcare – OOPs/Insurance • Private Individual Health Insurance – public sector and private sector • Government/private employer purchased group health insurance • Social Insurance – CGHS, ESIS, welfare boards, Railways, Armed Forces, P&T…

  3. Public Health Services • Primary Healthcare – preventive, promotive and curative • Secondary and tertiary healthcare • Tax based financing v/s insurance • Public spending Rs. 1480 per capita or 1.02% of GDP

  4. Top 5 and Bottom 5 States

  5. Private Healthcare • Individual GP and consultant clinics – wide array of different systems and quacks • Nursing homes and maternity homes • Small to large to corporate hospitals • Diagnostic centres • Out-of pocket financing and private insurance • OOPs @ Rs 4000 per capita

  6. Health Insurance • 2016-17 Total Premiums Rs. 30392 crores covering 43.75 crore persons (Rs 695 per person) – 33% of population • Govt sponsored Rs 3090 crores covering 33.5 crore persons (Rs 92 per person) • Private Group Insurance Rs 14718 crores covering 7.05 crore persons (Rs. 2088 per person) • Individuals Rs 12584 crores covering 3.20 crore persons (Rs 3933 per person)

  7. Social Health Insurance • Central Govt. Health Scheme covering 3.4 million population @ Rs. 8497 per beneficiary (2018-19) • Employees State Insurance Scheme for organised sector employees drawing pay less than Rs.21000 per month covering 35.3 million insured person units @ Rs. 4052 per insured person (2018-19) • Armed forces 12 million beneficiaries @ Rs 7500 per beneficiary (2017-18) • Railways Rs 4155 per capita (2016-17) • Welfare Funds – Rs. 120 crore Health spend (2015)

  8. Deficits of the Public Health System • Deficit of Demand Based Planning (DPC, PIP..) • Deficit of investment and Expenditure (1.1% GDP, segmentation of healthcare) • Deficit of Governance and Implementation (top down decision making) • Deficit of Accountability & Legislative oversight (CBMP etc.) • Deficit of political will and executive commitment • Deficit of policy – market driven; need to reclaim healthcare as a public good

  9. New Health Policy 2015 Draft (i) That 2.5% of the gross domestic product (GDP) as public health spending should be reached by 2020, of which 70% should be on primary healthcare. (ii) That the per capita public spending on healthcare should be Rs.3,800 at 2015 prices. (iii) The Centre would contribute 40% of the resources instead of its present 20% share and for this would raise resources through health cess and cess on health degrading goods like tobacco, alcohol, etc.

  10. New Health Policy 2015…. (iv) That the states would have to commit 8% of their total budget for health. (v) That free drugs and diagnostics in all public health facilities would be available. (vi) That all district hospitals would be converted into medical colleges. (vii) That all healthcare facilities—infrastructure and human resources—would be as per the Indian Public Health Standards (IPHS) norms. (viii) That financing all the above would be largely through a tax-based mechanism.

  11. New Health Policy 2017 • 2015 Health Policy diluted by NITI Aayog • Privatisation, especially for secondary and tertiary care at its core • Ayushman Bharat Political Economy – NHPM and Health Wellness Centres • Emphasis on insurance based financing for above and dilution of tax based financing • Also privatisation of social insurance

  12. Why Health Insurance Won’t Work? • It has not worked anywhere in the World • Requires life long premium payments that increase with age and declining income • Unregulated healthcare system -absence of ethics and use of standard protocols in medical practice • Does not solve the OOPs problem and would on contrary increase household burden and debt • Favours the rich and promotes inequity and elitism

  13. Scope for Social Health Insurance • Expansion of Social Health Insurance models like ESIS and CGHS feasible • Universalize ESIS to cover the entire organized and unorganized sector – remove salary wage ceilings for coverage and keep a minimum threshold for contributions – this could raise up to 2% of GDP additionally for health sector • Above can cover 65-70% of workforce and the balance would be covered by state contributions

  14. Challenges • Health system needs to be organized and brought under a single umbrella through a legal and regulatory framework • Healthcare provision prices have to be regulated • A national social health insurance legislation would be needed to create a single framework • Public spending needed to be upped to at least 3% of GDP or Rs 4000 per capita at today’s prices • Needs political will like Thailand, Brazil etc..

  15. THANKS

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