"people who had health insurance coverage did not see any significant difference in their total real OOP health expenditures, relative to people without any health insurance"
Flimsy defense of National Health Protection Scheme (NHPS)
Livemint has an op-ed on National Health Protection Scheme (NHPS), otherwise known as Aayushmaan Bharat. The article argues that NHPS is a good idea and suggests ways to ensure smooth implementation. It is a flimsy defense of NHPS.
The article concludes that NHPS is a good idea based on the following arguments.
1. "Out-of-pocket payments for healthcare services are very high in our country (about 70%, according to the National Sample Survey Office, 2014), which causes impoverishment to nearly 7% of our population."
2. Evidence from Karnataka's Vajpayee Aarogyashree programme lowered mortality for covered diseases and erased rich-poor disparities in concerned mortality rates. It also lowered out of pocket expenditure.
3. "Existing evidence shows that providing insurance to the poor not only saves lives but is also “cost-effective.
The above three points are either inappropriate or incomplete arguments in defence of NHPS, far from terming it as a step in the right direction.
1. There is no debate on the fact that the out-of-pocket expenditure on health care is huge in India. But, National Health Accounts data points out that 42% of the total out-of-pocket spending (OOP) is used towards buying medicines.
Given this scenario, a simple and significant step to reduce OOP would be to make all medicines free. Expenditure on NHPS with no coverage for medicines, while still requiring people to buy medicines for other conditions too, may not be of much use.
It is, in fact, pointed out in one of the author's own paper.
2. While the authors agree that not every insurance programme has been successful, the cited programme VAS is not a representative example. A host of other programmes have failed but one can give a benefit of the doubt regarding the implementation quality. It thus brings us to the next aspect - the range of conditions and cost-effectiveness.
3. Surprisingly, the article claims the existence of evidence which shows that insurance programmes are cost-effective. The evidence on the same is to the contrary. Insurance programmes are anything but cost-effective. Starting from the US where they spend 18% of GDP but still don't get timely and quality care to the Indian data, insurance programmes are known for NOT being cost-effective, as Gulzar Natarajan points out.
4. The argument for primary and secondary healthcare as a prerequisite for good public health system is well taken but the budget allocation to the same is not proportional to its importance. The right question to ask is - assuming that there is an increased spending on health care, where should the increased funding go? Of course, if it ends up being the case that the overall expenditure on health care is NOT increased but money is rearranged towards NHPS, its a lost battle.
Overall, with no increased funding for primary and secondary care, with no coverage for medicines (42% of OOP), and with our existing weak state capacity, the defence for NHPS is flimsy.
The way out is to retain private insurance coverage for terminal illnesses with expensive treatments like cancer, but increase the spending significantly and use a bulk of it towards primary and secondary health care.